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3. ENERGY MANAGEMENT AND AUDIT

Syllabus

Energy Management & Audit: Definition, Energy audit- need, Types of energy audit, Energy management (audit)approach-understanding energy costs, Bench marking, Energy performance, Matching energy use to requirement, Maximizing system efficiencies, Optimizing the input energy requirements, Fuel and energy substitution, Energy audit instruments

3.1  Definition & Objectives of Energy Management

The fundamental goal of energy management is to produce goods and provide services with the least cost and least environmental effect.

The term energy management means many things to many people. One definition of ener- gy management is:

Another comprehensive definition is

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.

3.2         Energy Audit: Types And Methodology

Energy Audit is the key to a systematic approach for decision-making in the area of energy man- agement. It attempts to balance the total energy inputs with its use, and serves to identify all the energy streams in a facility. It quantifies energy usage according to its discrete functions. Industrial energy audit is an effective tool in definingand pursuing comprehensive energy man- agement programme.

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 rec- ommendations for improving energy efficiency with cost benefit analysis and an action plan to reduce energy consumption".

3.2.1   Need for Energy Audit

In any industry, the three top operating expenses are often found to be energy (both electrical and thermal), labour and materials. If one were to relate to the manageability of the cost or potential cost savings in each of the above components, energy would invariably emerge as a top ranker, and thus energy management function constitutes astrategic area for cost reduction. 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 improve- mentexists.

The Energy Audit would give a positive orientation to the energy cost reduction, preventive maintenance and quality control programmes which are vital for production and utility activi- ties. 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, identi- fy energy conservation technologies, retrofit for energy conservation equipment etc.

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 plan- ning a more effective use of energy throughout the organization.

3.2.2   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, 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

3.2.3 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

3.2.4 Detailed Energy Audit Methodology

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 energyusing 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

A Guide for Conducting Energy Audit at a Glance

Industry-to-industry, the methodology of Energy Audits needs to be flexible.

A comprehensive ten-step methodology for conduct of Energy Audit at field level is pre- sented below. Energy Manager and Energy Auditor may follow these steps to start with and add/change as per their needs and industry types.

Ten Steps Methodology for Detailed Energy Audit

Phase I -Pre Audit Phase Activities

A structured methodology to carry out an energy audit is necessary for efficient working. An initial study of the site should always be carried out, as the planning of the procedures neces- sary for an audit is most important.

Initial Site Visit and Preparation Required for Detailed Auditing

An initial site visit may take one day and gives the Energy Auditor/Engineer an opportunity to meet the personnelconcerned, to familiarize him with the site and to assess the procedures nec- essary to carry out the energy audit.

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
• To finalise Energy Audit team
• To identify the main energy consuming areas/plant items to be surveyed during the audit.
• To identify any existing instrumentation/ additional metering required.
• To decide whether any meters will have to be installed prior to the audit eg. kWh, steam, oil or gas meters.
• To identify the instrumentation required for carrying out the audit.
• To plan with time frame
• To collect macro data on plant energy resources, major energy consuming centers
• To create awareness through meetings/ programme

The main aims of this visit are: -

Phase II- Detailed Energy Audit Activities

Depending on the nature and complexity of the site, a comprehensive audit can take from sev- eral 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.

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 pre- liminary assessment of the cost of the improvementswill be made to indicate the expected pay- back on any capital investment needed. The audit report should conclude with specific recom- mendations for detailed engineering studies and feasibility analyses, which must then be per- formed to justify the implementation of those conservation measures that require investments.

The information to be collected during the detailed audit includes: -

1. Energy consumption by type of energy, by department, by major items of process equip ment, by end-use
2. Material balance data (raw materials, intermediate and final products, recycled materials, use of scrap or waste products, production of by-products for re-use in other industries, etc.)
3. Energy cost and tariff data
4. Process and material flow diagrams
5. Generation and distribution of site services (eg.compressed air, steam).
6. Sources of energy supply (e.g. electricity from the grid or self-generation)
7. Potential for fuel substitution, process modifications, and the use of co-generation systems (combined heat and power generation).
8. Energy Management procedures and energy awareness training programs within the establishment.

Existing baseline information and reports are useful to get consumption pattern, production cost and productivity levels in terms of product per raw material inputs. The audit team should col- lect the following baseline data:

-   Technology, processes used and equipment details

-   Capacity utilisation

-   Amount & type of input materials used

-   Water consumption

-   Fuel Consumption

-   Electrical energy consumption

-   Steam consumption

-   Other inputs such as compressed air, cooling water etc

-   Quantity & type of wastes generated

-   Percentage rejection / reprocessing

-   Efficiencies / yield

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.

Example: A flowchart of Penicillin-G manufacturing is given in the figure3.1 below. Note that waste stream(Mycelium) and obvious energy wastes such as condensate drained and steam leakages have been identified in this flow chart

The audit focus area depends on several issues like consumption of input resources, energy efficiency potential, impact of process step on entire process or intensity of waste generation / energy consumption. In the above process, the unit operations such as germinator, pre-fermen- tor, fermentor, and extraction are the major conservation potential areas identified.

Figure 3.1

Identification of Energy Conservation Opportunities

Fuel substitution: Identifying the appropriate fuel for efficient energy conversion

Energy generation :Identifying Efficiency opportunities in energy conversion equipment/util- ity such as captivepower generation, steam generation in boilers, thermic fluid heating, optimal loading of DG sets, minimum excess air combustion with boilers/thermic fluid heating, opti- mising existing efficiencies, efficienct energy conversion equipment, biomass gasifiers, Cogeneration, high efficiency DG sets, etc.

Energy distribution: Identifying Efficiency opportunities network such as transformers, cables, switchgears andpower factor improvement in electrical systems and chilled water, cool- ing 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

The Economic viability often becomes the key parameter for the management acceptance. The economic analysiscan 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 dura- tion measures, which have attractive economic viability, simplest of the methods, payback is usually sufficient. A sample worksheet for assessing economic feasibility is provided below:

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. Other projects have to be analyzed, engineered and budgeted for implementation in a phased manner. Projects relating to energy cascading and process changes almostalways involve high costs coupled with high returns, and may require careful scrutiny before funds can be committed. These projects are generally com- plex and may require long lead times before they can be implemented. Refer Table 3.1 for pro- ject priority guidelines.

3.3  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 modifiedfor specific requirement applicable for a particular type of industry.

The following Worksheets (refer Table 3.2 & Table 3.3) can be used as guidance for energy audit assessment and reporting.

3.4         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.

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

Fuel Costs

A wide variety of fuels are available for thermal energy supply. Few are listed below:

• Fuel oil
• Low Sulphur Heavy Stock (LSHS)
• Light Diesel Oil (LDO)
• Liquefied Petroleum Gas (LPG)
• COAL
• LIGNITE
• WOOD ETC.

Understanding fuel cost is fairly simple and it is purchased in Tons or Kiloliters. Availability, cost and quality are the main three factors that should be considered

Figure 3.2 Annual Energy Bill

while purchasing. The following factors should be taken into account during procurement of fuels for energy efficiency and economics.

• Price at source, transport charge, type of transport
• Quality of fuel (contaminations, moisture etc)
• Energy content (calorific value)

Power Costs

Electricity price in India not only varies from State to State, but also city to city and consumer to consumer though it does the same work everywhere. Many factors are involved in deciding final cost of purchased electricity such as:

• Maximum demand charges, kVA

(i.e. How fast the electricity is used? )

• Energy Charges, kWh

(i.e., How much electricity is consumed? )

• TOD Charges, Peak/Non-peak period (i.e. When electricity is utilized ?)
• Power factor Charge, P.F

(i.e., Real power use versus Apparent power use factor )

• Other incentives and penalties applied from time to time
• High tension tariff and low tension tariff rate changes
• Slab rate cost and its variation
• Type of tariff clause and rate for various categories such as commercial, residential, industrial, Government, agricultural, etc.
• Tariff rate for developed and underdeveloped area/States
• Tax holiday for new projects

Example: Purchased energy Bill

A typical summary of energy purchased in an industry based on the invoices

Unfortunately the different forms of energy are sold in different units e.g. kWh of electricity, liters of fuel oil, tonne of coal. To allow comparison of energy quantities these must be con- verted to a common unit of energy such as kWh, Giga joules, kCals etc.

Electricity (1 kWh)                                         = 860 kCal/kWh (0.0036 GJ) Heavy fuel oil (Gross calorific value, GCV) =10000 kCal/litre ( 0.0411 GJ/litre) Coal (Gross calorific value, GCV)     =4000 kCal/kg    ( 28 GJ/ton)

3.5  Benchmarking and Energy Performance

Benchmarking of energy consumption internally (historical / trend analysis) and externally (across similar industries) are two powerful tools for performance assessment and logical evo- lution 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. Few comparative factors, which need to be looked into while benchmarking exter- nally 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 (capacityutilization)
  • 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. The benchmark parameters can be:
    • Gross production related

e.g. kWh/MT clinker or cement produced (cement plant)

e.g. kWh/kg yarn produced (Textile unit)

e.g. kWh/MT, kCal/kg, paper produced (Paper plant)

e.g. kCal/kWh Power produced (Heat rate of a power plant)

e.g. Million kilocals/MT Urea or Ammonia (Fertilizer plant)

e.g. kWh/MT of liquid metal output (in a foundry)

• Equipment / utility related

e.g. kW/ton of refrigeration (on Air conditioning plant)

e.g. % thermal efficiency of a boiler plant

e.g. % cooling tower effectiveness in a cooling tower

e.g. kWh/NM³ of compressed air generated

e.g. kWh /litre in a diesel power generation plant.

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 mentioned alongside heat rate (kCal/kWh).
• For a fertilizer plant - capacity utilization(%) and on-stream factor are two inputs worth comparing while mentioning specific energy consumption
• For a foundry unit - melt output, furnace type, composition (mild steel, high carbon steel/cast iron etc.) raw material mix, number or power trips could be some useful operating parameters to be reported while mentioning specific energy consumption data.

• For an Air conditioning (A/c) plant - Chilled water temperature level and refrigeration load (TR) are crucial for comparing kW/TR.
• For a boiler plant - fuel quality, type, steam pressure, temperature, flow, are useful com parators alongside thermal efficiency and more importantly, whether thermal efficiency is on gross calorific value basis or net calorific value basis or whether the computation is by direct method or indirect heat loss method, may mean a lot in benchmarking exer cise for meaningful comparison.
• Cooling tower effectiveness - ambient air wet/dry bulb temperature, relative humidity, air and circulating water flows are required to be reported to make meaningful sense.
• Compressed air specific power consumption - is to be compared at similar inlet air tem perature and pressure of generation.
• Diesel power plant performance - is to be compared at similar loading %, steady run condition etc.

Plant Energy Performance

Plant energy performance (PEP) is the measure of whether a plant is now using more or less energy to manufacture its products than it did in the past: a measure of how well the energy management programme is doing. It compares the change in energy consumption from one year to the other considering production output.Plant energy performance monitoring compares plant energy use at a reference year with the subsequent years to determine the improvement that has been made.

However, a plant production output may vary from year to year and the output has a sig- nificant bearing onplant energy use. For a meaningful comparison, it is necessary to determine the energy that would have been required to produce this year production output, if the plant had operated in the same way as it did during thereference year. This calculated value can then be compared with the actual value to determine the improvement ordeterioration that has taken place since the reference year.

Production factor

Production factor is used to determine the energy that would have been required to produce this year's productionoutput if the plant had operated in the same way as it did in the reference year. It is the ratio of production in the current year to that in the reference year.

Production factor = Current year' s production

Reference year's production

Reference Year Equivalent Energy Use

The reference year's energy use that would have been used to produce the current year's pro- duction output may be called the "reference year energy use equivalent" or "reference year equivalent" for short. The reference year equivalent is obtained by multiplying the reference year energy use by the production factor (obtained above)

Reference year equivalent = Reference year energy use x Production factor

The improvement or deterioration from the reference year is called "energy performance" and

is a measure of the plant's energy management progress. It is the reduction or increase in the current year's energy use over the reference, and is calculated by subtracting the current year's energy use from the reference years equivalent. The result is divided by the reference year equivalent and multiplied by 100 to obtain a percentage.

Plant energy performance =

Reference year equivalent - Current year's energy Reference year equivalent

x 100

The energy performance is the percentage of energy saved at the current rate of use compared to the reference year rate of use. The greater the improvement, the higher the number will be.

Monthly Energy Performance

Experience however, has shown that once a plant has started measuring yearly energy perfor- mance, management wants more frequent performance information in order to monitor and control energy use on an on-going basis. PEP can just as easily be used for monthly reporting as yearly reporting.

3.6         Matching Energy Usage to Requirement

Mismatch between equipment capacity and user requirement often leads to inefficiencies due to part load operations, wastages etc. Worst case design, is a designer's characteristic, while opti- mization is the energy manager's mandate and many situations present themselves towards an exercise involving graceful matching of energy equipment capacity to end-use needs. Some examples being:

• Eliminate throttling of a pump by impeller trimming, resizing pump, installing variable speed drives
• Eliminate damper operations in fans by impeller trimming, installing variable speed dri ves, pulley diameter modification for belt drives, fan resizing for better efficiency.
• Moderation of chilled water temperature for process chilling needs
• Recovery of energy lost in control valve pressure drops by back pressure/turbine adop tion
• Adoption of task lighting in place of less effective area lighting

3.7         Maximising System Efficiency

Once the energy usage and sources are matched properly, the next step is to operate the equip- ment efficiently through best practices in operation and maintenance as well as judicious tech- nology adoption. Some illustrations in this context are:

• Eliminate steam leakages by trap improvements
• Maximise condensate recovery
• Adopt combustion controls for maximizing combustion efficiency
• Replace pumps, fans, air compressors, refrigeration compressors, boilers, furnaces, heaters and other energy consuming equipment, wherever significant energy efficiency margins exist.

Optimising the Input Energy Requirements

Consequent upon fine-tuning the energy use practices, attention is accorded to considerations for minimizing energy input requirements. The range of measures could include:

• Shuffling of compressors to match needs.
• Periodic review of insulation thickness
• Identify potential for heat exchanger networking and process integration.
• Optimisation of transformer operation with respect to load.

3.8  Fuel and Energy Substitution

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

Energy is an important input in the production. There are two ways to reduce energy depen- dency; energy conservation and substitution.

Fuel substitution has taken place in all the major sectors of the Indian economy. Kerosene and Liquefied Petroleum Gas (LPG) have substituted soft coke in residential use.

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 LDO by LSHS Few examples of energy substitution

✓           Replacement of electric heaters by steam heaters

✓           Replacement of steam based hotwater by solar systems

Case Study : Example on Fuel Substitution

A textile process industry replaced old fuel oil fired thermic fluid heater with agro fuel fired heater. The economics of the project are given below:

A: Title of Recommendation            : Use of Agro Fuel (coconut chips) in place of Furnace oil in a Boiler

B: Description of Existing System

and its operation                               : A thermic fluid heater with furnace oil currently.

In the same plant a coconut chip fired boiler is operating continuously with good performance.

C: Description of Proposed system

and its operation                               : It was suggested to replace the oil fired thermic fluid heater with coconut chip fired boiler as the company has the facilities for handling coconut chip fired system.

D: Energy Saving Calculations Old System

Type of fuel Firing                            : Furnace Oil fired heater

GCV                                                    : 10,200 kCal/kg

Avg. Thermal Efficiency                     : 82%

Heat Duty                                            : 15 lakh kCal / hour

Operating Hours                                 : 25 days x 12 month x 24 hours = 7,200 hrs.

Annual Fuel Cost                                : Rs.130 lakh (7200 x 1800 Rs./hr.)

Modified System

Type of fuel saving                                        = Coconut chips fired Heater

GCV                                                               = 4200 kCal/kg

Average Thermal Efficiency                           = 72 %

Heat Duty                                                       = 15 lakh kCal / hour

Annual Operating Cost                                   = 7200 x 700 Rs./hr = 50 lakh

Annual Savings                                              = 130 - 50 = Rs.80 lakh . Additional Auxiliary Power +

Manpower Cost                                              = Rs. 10 lakh

Net Annual Saving                                         = Rs. 70 lakh Investment for New Coconut Fired heater      = Rs. 35 lakh

Simple pay back period                               = 6 months

3.9  Energy Audit Instruments

The requirement for an energy audit such as identification and quantification of energy neces- sitates measurements; these measurements require the use of instruments. These instruments must be portable, durable,easy to operate and relatively inexpensive. The parameters generally monitored during energy audit may include the following:

Basic Electrical Parameters in AC &DC systems - Voltage (V), Current (I), Power factor, Active power (kW), apparent power (demand) (kVA), Reactive power (kVAr), Energy consumption (kWh), Frequency (Hz), Harmonics,etc.

Parameters of importance other than electrical such as temperature & heat flow, radiation, air and gas flow, liquid flow, revolutions per minute (RPM), air velocity, noise and vibration, dust concentration, Total Dissolved Solids (TDS), pH, moisture content, relative humidity, flue gas analysis - CO₂, O₂, CO, SO_x, NO_x, combustion efficiency etc.

Key instruments for energy audit are listed below.

The operating instructions for all instruments must be understood and staff should familiarize themselves with the instruments and their operation prior to actual audit use.