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Energy Audit: cost-effective solutions for the industry in the era of energy crisis (Part-1)

Energy Auditing is a methodical approach for decision-making in the area of energy management. It endeavors to balance the total energy inputs with their use and identify all the energy streams in a facility, to quantify use of energy according to its discrete functions that identify means and measures to reduce the use of energy. Energy management is using energy audits as an efficient tool in defining and pursuing a comprehensive energy management program within a business. The role of an energy auditor is to provide professional advice in energy efficiency to the industrial unit management in terms of cost saving to make it an attractive package to the Industry owners and managers. An energy auditor assists the management by proposing projects that are economically attractive and environmentally favorable. In this part of the article, the basic concept and methodology of the energy audit will be discussed and the detailed calculation procedure will be focused in the second part of this article.

An energy auditor must concentrate upon the conversion of energy i.e. whether it is efficient or not. Regarding the conversion, we can categorize energy in major two parts: primary energy and secondary energy. Energy can also be classified as commercial/non-commercial and renewable/non-renewable energy. Primary energy sources are naturally found or stored in Earth. Most common primary energy sources are fossil fuels like coal, oil, natural gas, and biomass. Other primary energy sources include nuclear energy from radioactive isotopes or some renewable sources like, geo-thermal energy from the Earth’s interior, potential energy due to the Earth’s gravity (hydro-electricity), solar intensity or wind velocity. The major sources of primary and secondary energies are shown in Figure 1.

Figure 1: Major primary and secondary energy sources.

In industrial utilities, primary energy sources are mostly transformed into secondary energy sources, for example coal, oil, or natural gas converted into steam and electricity. These conversions introduce energy losses that should be considered in the calculations. Primary energy can also be used directly. Some energy sources have other uses, for instance, natural gas can be used as a raw material in fertilizer plants.

Energy sources that exist on the market for a price are known as commercial energy. By far, the most important forms of commercial energy are electricity, natural gas, and refined-petroleum products. Commercial energy forms the basis of industrial, agricultural, transport, and commercial development in the modern era. Non-commercial energy sources include fuels, such as kindling, cattle manure, waste, etc., which are traditionally gathered and not bought at a set price especially in rural households. These are also called traditional fuels or biomass. Non-commercial energy is often ignored in energy accounting.

Renewable energy is energy obtained from sources that are replacing themselves; they are essentially inexhaustible. Examples of renewable resources include wind power, solar power, geothermal energy, tidal power, and hydroelectric power (Figure 2). The most important feature of renewable energy is that it can be harnessed without the release of harmful pollutants; therefore it is also known as the green energy. Non-renewable energy includes conventional fossil fuels such as coal, oil, and gas, which are likely to be depleted over time.

Figure 2: Renewable and non-renewable energy.

Global primary energy reserve of coal is an estimate of 984.453 billion tons, 1.147 trillion barrels of oil and 176 trillion cubic meters of natural gas by the end of 2003. However, the global primary energy consumption at the end of 2003 was equivalent to 9,741 million tons of oil equivalent (Mtoe)[world energy review 2004]. Figure 3 shows fossil fuels are still the predominating energy sources and that’s a warning message for all. Before the industrial revolution, human activities discharged very few gases into the atmosphere and all climate changes happened naturally. After the industrial revolution, through fossil fuel combustion, and deforestation, the natural composition of gases in the atmosphere began to be affected increasingly and climate and environment began to alter significantly. The less usage of energy will ensure less environmental impact, reduce production cost and confirm profit maximization of the company entrepreneurs. [2]



Figure 3: World Primary and renewable energy consumption excluding solar and geo-thermal sources (BP statistical review of world energy 2003/2007). [9]

In any industry, the three top operating costs are often found to be Energy (electrical or thermal), Workforce and Raw materials. In most assessments of the expenditure or potential cost savings in each of the above components, energy would invariably emerge as the top ranker, and thus energy management function constitutes a strategic area for cost reduction. The primary objective of the energy audit is to determine ways to reduce energy consumption per unit of product output or to lower operating costs. In order of executions, energy audits can be classified into the following three types:

a. Walk-through audit
b. Standard audit
c. Detailed audit

The Walk-through audit usually takes a day. The purpose is to meet the management and engineering team, and get a general idea of the state of housekeeping, maintenance, and the support from the staff for further auditing work. Besides some general recommendations in the report, its main purpose is to prepare for a Detailed Audit.

The Standard audit report gives an overview of all energy consumptions and supplies. The report usually ends with a preliminary list of potential energy saving options (energy conservation opportunities, ECOs) and recommendations for areas where detailed study is required.

The Detailed Audit is based on the data from the Walk-through or Standard audit plus the detailed data that have been gathered during the DEA (detailed energy audit) study. It contains the full report, including detailed description of the proposed projects (ECOs), with cost estimates and time schedule for implementation. However, the factory management may not be interested in kWatts and MJoules, therefore, it’s expected to translate efficiency into monetary units as soon as the audit is performed. Many a times, the price of fuels is not proportional to its energy content, but the monetary value may decide that some fuel substitutions are beneficial; as example, replacing electricity with gas for heating purposes. [3,4]

Figure 4: Sankey diagram of the energy loss in IC engine. (Source: Energy Audit Methodology, Danish Energy Management, 2011)

During the walk-through energy audit, the major concern of an energy auditor is to identify Energy Conservation Opportunities (ECO). Several key ECOs are: [1]

Fuel substitution: Identifying alternative fuels for efficient energy conversion.
Energy generation: Identifying efficiency opportunities in energy conversion equipment/utilities such as captive (own) power generation, steam generation in boilers, water heating, optimal loading of diesel generator sets, minimum excess air combustion with boilers/water heating, optimizing existing efficiencies, efficient energy conversion equipment, etc.
Energy distribution: Identifying efficiency opportunities networks 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 one of the major opportunities for improvement and most remain hidden. Process analysis is a useful tool for process integration measures that can greatly improve energy efficiency.

The preliminary recommendations of the walk-through visit should include the results of the evaluation step, which can be used to identify three types of conservation opportunities: [7,8]

a. Housekeeping measures, (Operation and maintenance)
b. Small-medium investments and quick measures
c. Capital-intensive measures.

Each energy conservation opportunity recommended will have i) a brief statement of the existing situation, ii) short description of the technical or operational requirements of the proposed energy conservation measure, iii) estimation of the anticipated energy and cost saving by implementing the proposal, and lastly, iv) an estimate of the cost of implementation. At last a financial analysis showing the simple payback period is necessary for the decision making of the management.

A well performed energy audit will always help managers to understand more about the ways energy and fuel are used in their industry. This will also help to identify areas where waste occurs and where scopes for improvement exist. An energy audit gives a positive orientation to the energy cost reduction, preventive maintenance, and quality control programs which are vital for production and utility activities. The variation in the energy costs, availability, and reliability of supply of energy will be scrutinized from this package. Moreover, energy audit helps deciding on the appropriate energy mix, identify energy conservation technologies, retrofit for energy conservation equipment, etc. In Asia, Japan leads the energy audit program since 1955, India in 1963, Pakistan in 1984 [6]. What remains as an anticipation is to see Bangladesh perform active energy efficiency like the other Asian countries.

1. Danish Energy Management Report: Energy Auditor Training to Build Capacity of Service Providers (SPs) in Bangladesh and Nepal, February-April, 2011.
2. IFC Sustainable Energy Finance Report: A Combined Advisory and Investment Services Approach to Help Reduce GHG Emissions, November 2009.
3. A Guidebook for Performing Walk-through Energy Audits of Industrial Facilities, Milan,C.B., Energy Efficiency Dept., Bonneville Power Administration, Portland, Oregon.
4. Working Manual on Energy Auditing in Industries, Asian Productivity Organization, 2008. ISBN: 92-833-7069-4
5. An Energy Audit Manual and Tool, Canadian Industry Program for Energy Conservation.
6. Cleaner Production – Energy Efficiency Manual for GERIAP, UNEP, Bangkok, National Productivity Council.
7. Energy management handbook, Wayne C. Turner, Steve,D., John Wiley and Sons, 7th Edition.
8. Washington State University Energy Program Energy Audit Workbook, May 2003, WSU, USA.
9. BP Statistical Review of World Energy, 2003 and 2007.



To cite this article, please use following information:

(use the given format or any standard citation format)

Nuvan, M.M.J., Energy Audit: cost-effective solutions for the industry in the era of energy crisis (Part-1), ChE Thoughts 2 (2), 13-18, 2011.