ENERGY MANAGEMENT

ENERGY MANAGEMENT
• Rising energy costs have made energy
management a priority for facility
managers and commercial building owners.

• Energy management is all about reducing the

cost of energy used by an organization, now
with the added spin of minimizing carbon
emissions as well.
 Definition of “Energy Management”
 Many definitions have been offered for
“Energy Management”

 The common, easily remembered definition

based on the etymology of management may
help.
 The word management is derived from the
Latin root manus agere, with manus meaning
hand and agere to act.
 Thus, management means the act of handling
everything and anything.

 Therefore, when energy is the object of

any effort in an organization, the term energy
management is used.
 Definition from German Association
of Engineers (Guideline 4602)
Define:
• “Energy management as the proactive,
organized and systematic coordination of
procurement, conversion, distribution and
use of energy to meet the requirements,
taking into account environmental and
economic objectives”
• The definition is precise and describes what
actually has to be done.
 Definition by: Cape Hart, Turner
and Kennedy (1997)
“Energy Management is the judicious and effective
use of energy to maximize profits (i.e. minimize
costs) and enhance competitive positions.”

 This definition captures the key principles

Effective use of energy
Maximising profits
Claiming a competitive niche
 Therefore, any management activity that affects
the use of energy falls under this definition
• Among the practices that arise from the above
definition are the following:

• Eliminate Waste: Ensure that energy is used

at the highest possible efficiency.
• Maximize Efficiency: Utilize the most
appropriate technology to meet
organizational needs.
• Optimize Supply: Purchase or supply energy at
the lowest possible cost.
• The primary objective of EM is therefore to
maximize profit and minimize costs by
optimizing energy procurement and
utilization.
• It represents a real chance for creative
management to reduce that component of
product cost.
• Energy management is thus action oriented;

 it constitutes the rules for setting and

achieving a company’s energy performance
goals.
 Motivation to Energy Management
• The driving force behind the motivation to
energy management in our industrial sector
includes:
1)Competitiveness
2)Short Falls in power supplies
3)Environmental Management Systems
4)Global Climate Change
 Competitiveness
• Although energy cost may constitute a
relatively small part of total operating
cost, for many industries, it is one of
the most manageable resources among
labour and material.

• Reductions in energy consumption and

thereby reducing energy cost are very vital for
any industry to remain competitive.
 Short Falls in power supplies
• Due to limitations in power supply
infrastructures, many industries face power
supply problems in terms of reliability
and quality of the power supply and

• Increasing energy demand and

industrialization have led to predictions
of a serious supply shortfall.
Environmental Management Systems
• In certain parts of the world, especially
in Europe, ISO 14001 standard on
Environmental Management is increasingly
becoming a requirement for trade.

• Energy Management is an important

component of Environmental Management
and waste reduction strategies, and
features significantly in ISO14001.
 Global Climate Change
• The global climate is changing because of
human activity,
• One of the major causes of climate change
is the emission of GHG, principally CO2,
into the atmosphere from the combustion
of fossil fuels.
• There is international pressure to reduce
GHG emissions by reducing energy
consumption
 Global Climate Change
• COP26 agreed to closing the gap to limiting
global warming to 1.5 degrees C by 2030.
• Curb methane emissions, halt and reverse
forest loss, align the finance sector with net-
zero by 2050,
• COP26 also agreed to ditch the IC engines,
• Phase-out of coal, and end international
financing for fossil fuels, to name just a few.
 Energy is a Manageable Expense
• Energy (electricity, coal and fuel), labour and
materials are the top three operating
expenses for many organisations.

• A study in India showed that as much as

25% savings in energy costs can be
achieved by implementing an energy
management program.
Cost Savings in Energy, Labour &
Materials
• On the basis of the amount spent, energy
often ranks third on the list behind labour and
materials.
• However, if we rank these cost centres in
terms of the potential for savings, many
companies find that energy moves to the first
priority position.
• In fact Energy Management would deliver
about twice the savings that materials
management would and five times what
labour cost management offers.

• Energy consumption and cost can be

controlled
• Even lions can be tamed!
Manageability of Energy
 Impact of Energy management
• Energy management has the greatest impact
when organisations address the following
three dimensions:
 Technical
 Organizational and
 Human behavioural
 Technical
• The energy consuming devices and
systems that use energy efficiently, or
inefficiently.
• Energy management practices may vary
from simple maintenance and operational
activities that ensure equipment and systems
use energy efficiently and effectively, to capital
intensive installation of new, more efficient
technology.
 Organizational
• The structure and management systems
that can support the achievement of
energy efficiency goals.
 Human behavioural
• The personal values, attitudes and
practices of individuals in the
organization that impact on energy use.
Principles of Energy Management
• Principles of EM employed include the
following:
1)Identification and tracking of Energy
Pattern

2)Controlled energy system’s use

3)Properly maintained and managed facilities

4) Good Maintenance practices

5) Preventive and Reactive Maintenance

6) Distinction between Maintenance and

energy Management

7) Automated Energy Management Systems

 Identification & tracking of
Energy Pattern
The first step of any program is identifying and
tracking the energy pattern of that program.

• If we do not have the knowledge of when and

where the energy is used, then there is no
way to estimate the relative importance of
any Energy Management Project.
 Control energy system’s use
• To obtain higher energy savings, it is not
important to install efficient components in
place of non-efficient devices.

• It is more important that we must keep a

check on the system’s use and ensure that the
resources are aptly used.
Proper maintenance and managed
facilities
• A program with effectively maintained and
managed facilities is the only program that
offers effectual Energy Management.

• The quantity of technological equipment has

nothing to do with the success of energy
management program.
 Good Maintenance practices
• To attain the highest rates of return on Energy
Conservation, it is important to keep in
mind the maintenance practices in the
program.
• Great Maintenance and Successful Energy
Management go hand in hand,
• So good maintenance, can achieve success in
any energy management programs.
 Preventive and Reactive
Maintenance
• Despite the funding limitations, waiting for any
crisis to take place is a waste of time, i.e.,
reactive maintenance is imprudence (lacks
wisdom).
• Hence, preventive maintenance is critical for the
program’s success.
• It can be ignored when the system is new,
• As the system ages, preventive maintenance
comes in.
Distinction between Maintenance &
energy Management
• Know the clear distinction between
Maintenance and Energy Management.
• Cleaning and fixing of equipment for better use is
good maintenance while installation of more
efficient equip. is good EM.
• Both of these serve different purposes.
• It is very important to remember their difference
whenever a budget is being prepared for any
program.
 Automated Energy Management
Systems
• Even the most overrated technologies of
automated energy management systems
cannot recompense for a poor HVAC system
design.
• No automation can bring more performance
out of any system components if heating
and cooling of loads is incorrectly calculated
or if the set of equipment is inappropriate.
 Energy Management Cycle
• Energy Management is the stepping stone for
the energy conservation and cost reduction
process.

• Typical Energy Management cycle is shown

Typical Energy Management Cycle
• Managing energy, as with any other resource,
requires the development of an
understanding of its use within an
organisation.

• At the core of energy management is the

process of monitoring and targeting (M&T)
• Monitoring &Targeting is based on the
fundamental principle that ‘you cannot
manage what you do not measure’.

• It is the first crucial step towards improving an

organisation’s energy performance.
 Monitoring & Targeting
• M&T aims to identify opportunities to save
energy.
• Monitoring is the process of establishing
existing patterns of energy use and identifying
drivers and variables of those patterns.

• Targeting refers to the identification of the

desirable level of energy use
• Successful monitoring allows energy use to be
correlated with driving factors such as
weather, units of production and behaviour.

• As a result, areas of excessive and avoidable

energy consumption can be identified.
 Why manage energy?
There are a range of drivers that motivate
organisations to manage their energy use.

Efficient use of energy helps to maintain

competitive advantage and opens up many
other opportunities.
 Competitive advantage of
managing energy
• Reducing energy costs and minimising risks

• complying with policies and regulatory

frameworks

• Improving organisational effectiveness, and

• Improving corporate social responsibility

 Reducing energy costs and
minimising risks
• One of the main reasons for businesses to
manage their energy consumption is the
financial benefit,
• including reduced exposure to price- related
risks.
• Real end-use prices of electricity and fossil
fuels have become increasingly volatile
• Security of energy supply has risen to the top
of the political agenda in many countries.

• In order to mitigate energy price risks and

increase security of supply, many countries
have prioritised minimising demand through
increased energy efficiency as well as
diversifying their energy supply mix.
• At the business level, energy management
provides many opportunities for organisations
to minimise their exposure to these risks

• Increased energy efficiency can reduce the

amount of energy an organisation uses as well
as the associated energy costs.
• This can have a major impact on competitive
pricing of products and services, and thereby
the financial position of the organisation.

• Energy management can also help

organisations be more adaptable and resilient
to change
 Complying with policies and
regulatory frameworks
• The need for a worldwide transition to a low
carbon and more energy efficient economy
has led to the introduction of a wide range of
energy policies and regulatory frameworks.

• These apply at all scales, from country

initiatives to regional frameworks and
international agreements
• Climate Change Act 2008 established the
world’s first legally binding target for reducing
greenhouse gas emissions (80% reduction by
2050 compared to 1990 levels).

• To reach this target, countries are encouraged

to pursue many decarbonisation routes,
including investing in low carbon technologies
that reduce their energy demand
 Improving organisational
effectiveness
• Efficient use of energy helps an organisation
reduce energy costs and exposure to price
volatility.

• It can also have positive implications for other

non-energy aspects of business operations,
such as productivity levels, health and safety,
and equipment performance
• By identifying energy-inefficient practices and
equipment, and making adjustments
accordingly, a business can improve its
operational effectiveness, process
productivity, and overall competitiveness
• Reducing unnecessary use of equipment or
machinery can save energy.

• It can also improve overall safety in an

industrial unit or office building, through
reducing time spent in hazardous
environments or reducing the risk of
equipment damage.
 Improving corporate social
responsibility
• Putting in place a system to manage energy
use can be an aspect ofan organisation’s
corporate social responsibility initiative.

• It is an opportunity for an organisation to

demonstrate good practice to both customers
and shareholders.
• Successful energy management can benefit
the wider reputation of an organisation, raise
its profile and help the organisation gain a
competitive advantage in the market
 Implementing energy
management
• Managing energy in a systematic, structured
manner is an on-going process;

• Once the commitment has been made, an

organisation can follow a step-by-step process
that forms a continual cycle of assessment
and improvement
 Implementing energy
management
The general procedure for establishing an EM
program involves five steps:
i) Review historical energy use.
ii) Perform energy audits.
iii) Identify energy management opportunities.
iv) Implement changes to save energy.
v) Monitor the energy management program,
set goals, and review progress
 Review of Historical Energy Use
• The energy review should give a breakdown of
energy use within an organisation through the
analysis of:
• past energy consumption and

• present energy consumption data.

A successful energy review should lead to the
 identification of energy consumption patterns,
including peak consumption periods
 correlation of energy consumption to its
driving factors

 identification of the most energy intensive

areas and/or processes
 forecasting of future energy consumption

 identification and prioritisation of cost-

effective energy savings opportunities

• This information can be used to establish an

organisation’s energy baseline
 Energy baseline (EnB)
• EnB is defined as a quantitative reference(s)
providing a basis for comparison of energy
performance.
• It is the initial reference point to which future
energy consumption data can be compared.
• It is based on data from a specified period of
time and/or conditions, as defined by the
organization.
• EnB is thus a reference tool that allows you to
compare energy performance before and after a
change is made to your site or system and against
which improvements will be judged.

• It establishes the “before” by capturing a site or

system’s total energy use prior to making
improvements.
• It also accounts for energy affecting factors
like temperature or production volume.

• EnB is thus used for calculation of energy

savings, as a reference before and after
implementation of energy performance
improvement actions.
An energy baseline can be used to:
 identify and help understand the reasons for
fluctuations in energy consumption

 identify energy performance indicators

 estimate energy savings achieved through the

implementation of EM
• An effective baseline should cover energy use
over a representative period of time (e.g. over
a year)
• E.g. Utility records can be compiled to establish
electricity use for a recent 12-month period.
• This data is graphed on a form so that the
annual variations and trends can be evaluated.
Example: Annual variation on use
of energy
• By placing several years (e.g. last year, this year,
and next year projected) on the form, past
trends can be reviewed and future electricity
use can be compared with goals.

• Also several energy forms can be compared for

energy use vs. determined production (e.g.,
meals served for a restaurant, or kilograms of
laundry washed at dry cleaners)
Energy Audits