Energy Management - ALTTC Home Page

By Hector Morales,2014-04-05 05:18
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Use the most appropriate technology (select low investment technology to meet the An energy management policy statement includes a declaration of

    Energy Management


In today‟s power scenario, we are facing a major power crunch. Day by day,

    the gap between demand and supply of electric energy is widening. At

    present, the difference is about 8.8%, going up to about 12% in the peak

    period. Bridging this gap from the supply side is a very difficult and

    expensive proposition. Also, limited energy resources, scarcity of capital and

    high interest costs for the addition of new generation capacity is leading to

    the increased cost of electrical energy in India. The only viable way to

    handle this crisis, apart from capacity addition, is the efficient use of

    available energy, which is possible only by continuously monitoring and

    controlling the use of electrical energy.

    Indian Energy Scenario:

    ? Generation capacity increased from 1, 400MW in 1947 to 1, 12, 058

    MW in 2004.

    ? Gross generation increased 100-fold from 5 billion units per year to

    530 billion units per year in the same period.

    ? Still, the per capita electricity consumption is one of the lowest in the

    world @ 355kWh.

    ? Percentage of population with access to electricity is only 43% as

    against 98.6% in China and 52.9% in Pakistan.

    ? In spite of added generation capacity, it is still inadequate peak

    shortage @ 12.2% and energy shortage @ 8.8%.

    ? Below Optimum Utilisation of existing generation capacity Plant Load

    Factor only 72%.

    ? High T & D Losses 45 to 50% as against International standards of 8

    to 10%.

    ? Inefficient Utilisation of electric power by end consumer Planning

    Commission estimates that over 25, 000MW equivalent capacity

    creation could be achieved through efficient utilization of electric

    energy by the end user.

Energy Management:

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

? To minimise environmental effects.

     Principles of Energy Management:

The principles of Energy Management involve the following:

    i. Procure all the energy needed at the lowest possible price (Example:

    buy from original sources, review the purchase terms)

    ii. Manage energy use at the highest energy efficiency (Example:

    improving energy use efficiency at every stage of energy transport,

    distribution and use)

    iii. Reusing and recycling energy by cascading (Example: waste heat


    iv. Use the most appropriate technology (select low investment

    technology to meet the present requirement and environment


    v. Reduce the avoidable losses. (Make use of wastes generated within the

    plant as sources of energy and reducing the component of purchased

    fuels and bills)

Energy Management Strategy:

Energy management should be seen as a continuous process. Strategies

    should be reviewed annually and revised as necessary. The key activities

    involved in the process 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 for implementation.

    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 (electricity, fuel oil, gas, petrol etc.)

    ? Energy cost reduction (by lowering consumption and negotiating

    lower unit rates)

    ? Timetables

    ? Budgetary limits

    ? Energy cost centers

    ? 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. An overall strategy could be to introduce energy management projects, which will achieve maximum financial benefits at least cost to the organisation.

    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.


    Energy management is a comprehensive and systematic approach for energy conservation efforts in an organization. All the steps mentioned above are required to taken in true spirit for achieving sustainable results in the field of energy conservation.


    i) Bureau of Energy Efficiency website

    ii) „Short Circuiting Power Reforms” – By Mr. S. D. Naik, published in

     The Hindu Business Line, dated June 18, 2005

    The fundamental goal of energy management is to produce goods and provide services with the least cost and least environmental effect. (Cape Hart, Turner and Kennedy, Guide to Energy Management Fairmont press inc. 1997)

    Another comprehensive definition is

    “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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