Chapter 1

Introduction to Energy Management

Topics
Exercises
Introduction to Energy Management :Topics

1.1) Definition of energy

1.2) Global energy trends
1.3) Definition of energy management
1.4) Objectives of Energy Management
1.5) Principles of Energy management
1.6) Key elements of Energy management
1.7) Energy Accounting
Introduction to Energy
Management

1.1) Definition of energy

1.1) Definition of energy
Energy is commonly defined as the ability to do
work or to produce heat.

1. Normally heat could be derived by burning a fuel—i.e. a

substance that contains internal energy which upon burning
generates heat, or
2. By capturing the sun’s rays, or from the rocks below the
earth’s surface

3. the ability to do work may represent the capability (or

potential) of doing work (known as potential energy as in
stored water in a dam) or
4. its manifestation in terms of conversion to motive power
(known as kinetic energy as in the case of wind or tidal
waves).
 Thus energy manifests itself in many forms: heat, light,
motive force, chemical transformation, etc.
1.1) Definition of energy

Classification of energy sources

1.1) Definition of energy

Knowing the
terminology of
energy use and the
units of measure is
essential to
developing a strong
energy
management
background
Introduction to Energy
Management

1.2) Global energy trends

 1.2) Global energy trends
Global energy demand is projected to increase by just over one-half between
2004 and 2030 – an average annual rate of 1.6%. Over 70% of this increased
demand comes from developing countries
Global Energy Demand Growth by Region (1971-2030)
18 000
Energy Demand (Mtoe)

16 000

14 000

12 000

10 000

8 000

6 000

4 000

2 000

0
1971 1990 2004 2015 2030

OECD Transition Economies Developing Countries

Notes: 1. OECD refers to North America, W. Europe, Japan, Korea, Australia and NZ Source: IEA World Energy Outlook
2. Transition Economies refers to FSU and Eastern European nations 2006
3. Developing Countries is all other nations including China, India etc.
1.2) Global energy trends

Energy cost is increasing

Energy Demand (Mtoe)
1.2) Global energy trends

• CO2 is at 407ppm (Oct

2018) increased by
90ppm in the last 70
years
• Global warming ~1.1°C in
the past 200 years
• Rising sea level ~3.2mm
each year
• Decreasing ice sheet
mass
• Decreasing Arctic ice at
a rate of 13% each
decade
1.2) Global energy trends

– Global demand for all energy sources is foreseen to grow

by 57% over the next 25 years

– Electricity demand will grow by at least 40% by 2032

– New power generation equals to nearly 300 power plants
(1.000 MW) will be needed to meet electricity demand by
2030
– Currently, 50% of electrical generation relies on coal
and fossil fuel; while 85% of greenhouse gas emissions
result from energy-consuming activities supported by
fossil fuels
Introduction to Energy
Management

1.3) Definition of energy

management
1.3) Definition of energy management

“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”
Introduction to Energy
Management

1.4) Objectives of Energy

Management
 1.4) Objectives of Energy Management
The primary objective of energy management is to
maximize profits or minimize costs. Some desirable
subobjectives of energy management programs
include:
 Improving energy efficiency and reducing energy use,
thereby reducing costs
 Reduce greenhouse gas emissions and improve air
quality
 Cultivating good communications on energy matters
 Developing and maintaining effective monitoring,
reporting, and management strategies for wise energy
usage
 Finding new and better ways to increase returns from
energy investments through research and development
1.4) Objectives of Energy Management (cont’d.)
 Developing interest in and dedication to the energy
management program from all employees
1.4) Objectives of Energy Management (cont’d.)

The weight of Energy savings compared to other technologies

Introduction to Energy
Management

1.5) Principles of Energy

management
1.5) Principles of Energy management
 Control the cost of energy service provided and not
the BTU
1.5) Principles of Energy management

 Manage energy function as a product cost and not

as a general expenses
 Manage only major energy functions
 Concentrate energy management program on
installing contracts and achieving results
Introduction to Energy
Management

1.6) Key elements of Energy

management
1.6) Key elements of Energy management
The Energy Management System

The steps:

STEP 1: Make Commitment

STEP 2: Assess Performance
STEP 3: Set Goals
STEP 4: Create Action Plan
STEP 5: Implement Action Plan
STEP 6: Evaluate Progress
STEP 7: Recognize Achievements
1.6) Key elements of Energy management (cont’d.)
STEP 1: Commit to Continuous Improvement

 Organizations seeing the financial returns from superior

energy management continuously strive to improve their
energy performance. Their success is based on regularly
assessing energy performance and implementing steps to
increase energy efficiency.
 Form a Dedicated Team
1.1 Appoint an Energy Director: Sets goals, tracks
progress, and promotes the energy management program.
1.2 Establish an Energy Team: Executes energy
management activities across different parts of the
organization and ensures integration of best practices.
1.3 Institute an Energy Policy: Provides the foundation for
setting performance goals and integrating energy
management
1.6) Key elements of Energy management (cont’d.)
STEP 2: Assess Performance

 Understanding current and past energy use is how

many organizations identify opportunities to improve
energy performance and gain financial benefits. Assessing
performance is the periodic process of evaluating energy
use for all major facilities and functions in the organization
and establishing a baseline for measuring future results of
efficiency efforts.
1.6) Key elements of Energy management (cont’d.)
 Key aspects include in assessment:

2.1 Gather and track data — Collect energy use information and
document data over time.
2.2 Establish baselines — Determine the starting point from which
to measure progress.
2.3 Benchmark — Compare the energy performance of your
facilities to each other, peers and competitors, and over time to
prioritize which facilities to focus on for improvements.
2.4 Analyze — Understand your energy use patterns and trends.
2.5 Technical assessments and audits — Evaluate the operating
performance of facility systems and equipment to determine
improvement potential.
1.6) Key elements of Energy management (cont’d.)

 Assessing your energy performance helps you to:

•Categorize current energy use by fuel type, operating division,

facility, product line, etc.
•Priority to do poor performing facilities for immediate improvement.
•Understand the contribution of energy expenditures to operating
costs.
• Develop a historical perspective and context for future actions and
decisions.
•Establish reference points for measuring and rewarding good
performance.
1.6) Key elements of Energy management (cont’d.)
STEP 3: Set Goals

 Performance goals drive energy management activities and

promote continuous improvement.
 Well-stated goals guide daily decision-making and are the
basis for tracking and measuring progress. Communicating and
posting goals can motivate staff to support energy management
efforts throughout the organization.
 The Energy Director in conjunction with the Energy Team
typically develops goals.
1.6) Key elements of Energy management (cont’d.)

 To develop effective performance goals:

3.1 Determine scope - Identify organizational and time parameters

for goals.
3.2 Estimate potential for improvement - Review baselines,
benchmark to determine the potential and order of upgrades, and
conduct technical assessments and audits.
3.3 Establish goals - Create and express clear, measurable goals,
with target dates, for the entire organization, facilities, and other
units.
1.6) Key elements of Energy management (cont’d.)
STEP 4: Create Action Plan

 Successful organizations use a detailed action plan to

ensure a systematic process to implement energy
performance measures. Unlike the energy policy, the
action plan is regularly updated, most often on an annual
basis, to reflect recent achievements, changes in
performance, and shifting priorities.
1.6) Key elements of Energy management (cont’d.)
STEP 5: Implement Action Plan
To implement your action plan, consider taking the following
steps:
5.1 Create a communication plan - Develop targeted information
for key audiences about your energy management program.
5.2 Raise awareness - Build support at all levels of your
organization for energy management initiatives and goals.
5.3 Build capacity - You can expand the capacity of your staff
through providing training, access to information, sharing of
successful practices, procedures and technologies, and sharing of
lessons learned.
5.4 Motivate - Create incentives that encourage staff to improve
energy performance to achieve goals.
5.5 Track and monitor - Use the tracking system developed as part
of the action plan to track and monitor progress regularly.
1.6) Key elements of Energy management (cont’d.)
STEP 6: Evaluate Progress

 Evaluating progress includes formal review of both energy

use data and the activities carried out as part of the action
plan as compared to your performance goals.

6.1 Measure results - Compare current performance to

established goals.
6.2 Review action plan - Understand what worked well and
what didn't in order to identify best practices.
1.6) Key elements of Energy management (cont’d.)
STEP 7: Recognize Achievements

 Providing internal recognition - to individuals, teams, and

facilities within your organization.

 Receiving external recognition - from government

agencies, the media, and other third party organizations that
reward achievement.
Introduction to Energy
Management

1.7) Energy Accounting

1.7) Energy Accounting(cont’d.)

Energy accounting is a system used to keep track of energy

consumption and costs .A basic energy accounting system has
three parts: energy use monitoring, an energy use record, and a
performance measure

Energy
accounting system

Energy use Energy use Performance

monitoring record measure
1.7) Energy Accounting(cont’d.)
Performance Measures
Energy Utilization Index
A very basic measure of a facility’s energy performance is called the
Energy Utilization Index (EUI). This is a statement of the number of
Btu’s of energy used annually per square foot of conditioned space
1.7) Energy Accounting(cont’d.)
1.7) Energy Accounting(cont’d.)
1.6.2.2 Energy Cost Index (ECI)

Another useful performance index is the Energy Cost Index or ECI.

This is a statement of the dollar cost of energy used annually per
square foot of conditioned space. To compute the ECI, all of the
energy used in the facility must be identified, the total cost of that
energy tabulated, and the total number of square feet of conditioned
space determined. The ECI is then found as the ratio of the total
annual energy cost for a facility to the total number of square feet of
conditioned floor space of the facility
1.7) Energy Accounting(cont’d.)
1.7) Energy Accounting(cont’d.)
1.6.3 An Example Energy Accounting System