A TEXTBOOK OF

ENERGY AUDITING
&
DEMAND SIDE MANAGEMENT

By
K.MEENENDRANATH REDDY
Assistant Professor

EEE Department
 CONTENTS

UNIT - I
ENERGY AUDITING
Energy situation – world and India, energy consumption, conservation, Codes, standards and
Legislation. Energy audit - definitions, concept, types of audit, energy index, cost index, pie
charts, Sankey diagrams, load profiles, Energy conservation schemes. Measurements in
energy audits, presentation of energy audit results.

UNIT – II
ENERGY EFFICIENT MOTORS & POWER FACTOR
IMPROVEMENT
Energy efficient motors, factors affecting efficiency, loss distribution, constructional details,
characteristics - variable speed, variable duty cycle systems, RMS hp - voltage variation -
voltage unbalance - over motoring - motor energy audit. Power factor – methods of
improvement, Power factor with non linear loads.

UNIT – III
LIGHTING AND ENERGY INSTRUMENTS FOR AUDIT
Good lighting system design and practice, lighting control, lighting energy audit - Energy
Instruments- watt meter, data loggers, thermocouples, pyrometers, lux meters, tongue testers,
application of PLC’s

UNIT – IV
INTRODUCTION TO DEMAND SIDE MANAGEMENT
Introduction to DSM, concept of DSM, benefits of DSM, different techniques of DSM – time
of day pricing, multi-utility power exchange model, time of day models for planning. Load
management, load priority technique, peak clipping, peak shifting, valley filling, strategic
conservation, energy efficient equipment. Management and Organization of Energy
Conservation awareness Programs.
UNIT – V
ECONOMIC AND COST EFFECTIVENESS TESTS OF DSM
PROGRAMS
Basic payback calculations, depreciation, Net present value calculations. Taxes and tax credit
– numerical problems. Importance of evaluation, measurement and verification of demand
side management programs. Cost effectiveness test for demand side management programs -
Ratepayer Impact Measure Test, Total Resource Cost, Participant Cost Test, Program
Administrator Cost Test. Numerical problems: Participant cost test, Total Resource Cost test
and Ratepayer impact measure test.
 Abbreviations

GHG greenhouse gas

GWEC Global Wind Energy Council
FOLU forestry and other land use
Btu British thermal units
BT Billion Tonne
BCM Billion Cubic Metres
EMEs Emerging Market Economies (includes countries of South & Central
America, Africa, Middle-east, Non-OECD Asia &
Non-OECD Europe)
GW Giga Watt
GWh Giga Watt Hour
TWh Terawatt-hours
IAEA International Atomic Energy Agency
IEA International Energy Agency
IOC Indian Oil Corporation
IRES International Recommendations on Energy Statistics
KToE Kilo Tonne of oil Equivalent
KW Kilowatt
KWH Kilo Watt Hour
Lubes Lubricant
MJ Mega-joules
MMSCM Million Metric Standard Cubic Metres
MT Million Tonne
MW Megawatt
N.C.W Non-communist World
O.E.C.D Organization for Economic Cooperation & Development
PJ Peta-joules
PEC Per Capita Energy Consumption
SEEA System of Environmental Economic Accounting
SNA System of National Accounts
TEC Total Energy Consumption
TFC Total Final Consumption
TPES Total Primary Energy Supply
TMT Thousand Metric Tonne
TMTPA Thousand Metric Tons Per Annum
GDP Gross domestic product
 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

UNIT – I
ENERGY AUDITING

1.1 ENERGY SITUATION:-

Introduction:-
Energy is one of the major inputs for the economic development of any country. In
the case of the developing countries, the energy sector assumes a critical importance in view
of the ever-increasing energy needs requiring huge investments to meet them. With the
present situation of increasing energy demand, rising energy prices, and reinforcement of
countermeasures for global warming, renewable energy sources have taken the spotlight. Bio
fuels are one form of renewable energy that has become more widespread. Also, bio-fuels
have been introduced and expanded as alternative fuel for the transportation sector and as a
form of liquid renewable energy that can be blended with petroleum.
However, since the source material of bio-fuels is sometimes the same as for food, an
increase in grocery prices has drawn attention to the next generation of bio-fuels being non-
food sourced. This report will discuss the demand perspective derived from the IEA
(International Energy Agency) world energy forecast, basic energy price trends, and bio-fuel
trends.
Energy can be classified into several types based on the following criteria:
 Primary and Secondary energy
 Commercial and Non commercial energy
 Renewable and Non-Renewable energy

Primary and Secondary Energy:-

Primary energy sources are those that are either found or stored in nature. Common
primary energy sources are coal, oil, natural gas, and biomass (such as wood). Other primary
energy sources available include nuclear energy from radioactive substances, thermal energy
stored in earth’s interior, and potential energy due to earth’s gravity.
The major primary and secondary energy sources are shown in Figure, Primary
energy sources are mostly converted in industrial utilities into secondary energy sources; for
example coal, oil or gas converted into steam and electricity.
Primary energy can also be used directly. Some energy sources have non-energy uses,
for example coal or natural gas can be used as a feedstock in fertilizer plants.

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Fig: major primary and secondary energy sources

Commercial Energy and Non Commercial Energy:-

Commercial Energy:-
The energy sources that are available in the market for a definite price are known as
commercial energy. By far the most important forms of commercial energy are electricity,
coal and refined petroleum products. Commercial energy forms the basis of industrial,
agricultural, transport and commercial development in the modern world.
In the industrialized countries, commercialized fuels are predominant source not only
for economic production, but also for many household tasks of general population.
Examples:- Electricity, lignite, coal, oil, natural gas etc.

Non-Commercial Energy:-
The energy sources that are not available in the commercial market for a price are
classified as non-commercial energy. Non-commercial energy sources include fuels such as
firewood, cattle dung and agricultural wastes, which are traditionally gathered, and not
bought at a price used especially in rural households.
These are also called traditional fuels. Non-commercial energy is often ignored in
energy accounting.

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Example:- Firewood, agro waste in rural areas; solar energy for water heating, electricity
generation, for drying grain, fish and fruits; animal power for transport, threshing, lifting
water for irrigation, crushing sugarcane; wind energy for lifting water and electricity
generation.

Renewable and Non-Renewable Energy:-

Renewable energy is energy obtained from sources that are essentially inexhaustible.
Examples of renewable resources include wind power, solar power, geothermal energy, tidal
power and hydroelectric power (See Figure). The most important feature of renewable energy
is that it can be harnessed without the release of harmful pollutants.
Non-renewable energy is the conventional fossil fuels such as coal, oil and gas, which
are likely to deplete with time.

Renewable Non-Renewable
Fig: Renewable and Non-Renewable Energy

Global Primary Energy Consumption:-

World energy supply and consumption is global production and preparation of fuel,
generation of electricity, energy transport and energy consumption. It is a basic part of
economic activity. It does not include energy from food. Many countries publish statistics on
the energy supply and consumption of either their own country, of other countries of interest,
or of all countries combined in one chart. One of the largest organizations in this field,
the International Energy Agency (IEA), publishes yearly comprehensive energy data.[2] This
collection of energy balances is very large. This article provides a brief description of energy

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supply and consumption, using statistics summarized in tables, of the countries and regions
that produce and consume most.
The global primary energy consumption at the end of 2003 was equivalent to 9741
million tonnes of oil equivalent (Mtoe). The Figure shows in what proportions the sources
mentioned above contributed to this global figure.

The primary energy consumption for few of the developed and developing countries
is shown in Table. It may be seen that India's absolute primary energy consumption is only
1/29th of the world, 1/7th of USA, 1/1.6th time of Japan but 1.1, 1.3, 1.5 times that of
Canada, France and U.K respectively.

TABLE: - PRIMARY ENERGY CONSUMPTION BY FUEL, 2003

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

In the energy domain, there are many different units thrown around – joules,
exajoules, million tonnes of oil equivalents, barrel equivalents, British thermal units,
terawatt-hours, to name a few.
This is the worldwide production of energy, extracted or captured directly from
natural sources. In energy statistics primary energy (PE) refers to the first stage where energy
enters the supply chain before any further conversion or transformation process.
Energy production is usually classified as:
 fossil, using coal, crude oil, and natural gas;
 nuclear, using uranium;
 renewable, using biomass, geothermal, hydropower, solar, tidal, wave, wind, and
among others.
Primary energy assessment follows certain rules to ease measurement of different
kinds of energy. These rules are controversial. Water and air flow energy that drives hydro
and wind turbines, and sunlight that powers solar panels, are not taken as PE, which is set at
the electric energy produced. But fossil and nuclear energy are set at the reaction heat which
is about 3 times the electric energy. This measurement difference can lead to underestimating
the economic contribution of renewable energy.
The table lists the worldwide PE and the countries/regions producing most (90%) of
that. The amounts are rounded and given in million tonnes of oil equivalent per year (1 Mtoe
= 11.63 TWh, 1 TWh = 109 kWh). The data are of 2018.

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

Total final consumption (TFC) is the worldwide consumption of energy by end-

users (whereas primary energy consumption (Eurostat) or total energy supply (IEA) is total
energy demand and thus also includes what the energy sector uses itself and transformation
and distribution losses). This energy consists of fuel (78%) and electricity (22%). The tables
list amounts, expressed in million tonnes of oil equivalent per year (1 Mtoe = 11.63 TWh)
and how much of these is renewable energy. Non-energy products are not considered here.
The data are of 2018.
Fuel:
 Fossil: natural gas, fuel derived from petroleum (LPG, gasoline, kerosene, gas/diesel,
fuel oil), from coal (anthracite, bituminous coal, coke, blast furnace gas).
 Renewable: biofuel and fuel derived from waste.
The first table lists final consumption in the countries/regions which use most (85%), and per
person. In developing countries fuel consumption per person is low and more renewable.
Canada, Venezuela and Brazil generate most electricity with hydropower.

1.2 ENERGY CONSUMPTION:-

Energy consumption is the amount of energy or power used.
Energy use can be divided many different ways but the most common is through the
end product — either electricity; thermal energy, which is heating/cooling (including hot

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water); or transportation. You can also break down energy into its end-users, which are
described below.
1. Residential uses of energy:-
When we talk about residential uses of energy, these are the most basic uses of
energy. They include watching television, washing clothes, heating and lighting the home,
taking a shower, working from home on your laptop or computer, running appliances and
cooking. Residential uses of energy account for almost forty percent of total energy use
globally.
2. Commercial uses of energy:-
Commercial use of energy is what energy is used for in the commercial sector. This
includes heating, cooling and lighting of commercial buildings and spaces, power used by
companies and business throughout our cities for computers, fax machines, workstations, etc.
3. Transportation:-
Transportation is one hundred percent dependent on energy. Over seventy percent of
petroleum used goes into the transport sector. The transport sector includes all vehicles from
personal cars to trucks to buses and motorcycles. It also includes aircrafts, trains, ship and
pipelines. The transportation sector can be very vital in the overall quest for energy
conservation. Innovations such as the introduction of more fuel efficient vehicles and
development of alternative sources of energy for our transport system can greatly help in the
saving of energy.
Calculation of Energy Consumption:-
Electric energy (or) power consumption can be calculated using the following basic
formula.
Energy Consumption in Watt-hours = Power Rating in Wattage x Time in Hours
E = P x t (Wh)
“Wh” is a small unit to measure the energy usage. To convert it to the basic electricity unit
i.e. 1000 Watts per hour = 1kWh = 1 Unit of electricity, we divide it by 1000 i.e.
E = P x t ÷ 1000 (kWh)
Daily Energy Consumption
Power Consumption (Daily) = Power Usage (Watts) x Time (Hours)
Monthly Energy Consumption
Power Consumption (Monthly) = Power Usage (Watts) x Time (Hours) x 30 (Days)
Annual Energy Consumption
Power Consumption (Annual) = Power Usage (Watts) x Time (Hours) x 365 (Days)

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Primary energy is the inherent energy or energy potential of natural phenomena and
raw materials prior to further manipulation from humans. The most important primary energy
sources are fossil fuels such as crude oil, natural gas, and coal, as well as renewable sources
such as wind and solar energy. As the latter two are intangible, primary energy consumption
factors in the amount of electricity (a secondary energy form) generated via these sources.
Primary energy consumption worldwide in 2020, by country (in exajoules)

Primary energy is the energy inherent in natural resources such as crude oil, coal, and
wind before further transformation. For example, crude oil can be refined into secondary
fuels, such as gasoline or diesel, while wind is harnessed for electricity - itself a secondary
energy source. A country’s total primary energy supply is a measure of the country’s primary
energy sources. Meanwhile, end use energy is the energy directly consumed by the user and

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includes primary fuels such as natural gas as well as secondary sources like electricity and
gasoline.
Primary energy consumption worldwide in 2019 and 2020, by fuel type (in exajoules)

Primary energy consumption worldwide from 2000 to 2020 (in exajoules)

The major commercial energy consuming sectors in the country are classified as
shown in the Figure. As seen from the figure, industry remains the biggest consumer of
commercial energy and its share in the overall consumption is 43%. The per capita energy
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consumption is too low for India as compared to developed countries. It is just 4% of USA
and 20% of the world average. The per capita consumption is likely to grow in India with
growth in economy thus increasing the energy demand.

1.3 ENERGY CONSERVATION:-

Energy conservation refers to reducing energy consumption through using less of an
energy service. Energy conservation differs from efficient energy use, which refers to using
less energy for a constant service. For example, driving less is an example of energy
conservation. Driving the same amount with a higher mileage vehicle is an example of
energy efficiency.
Energy conservation and efficiency are both energy reduction techniques. Coal and
other fossil fuels, which have taken three million years to form, are likely to deplete soon. In
the last two hundred years, we have consumed 60% of all resources. For sustainable
development, we need to adopt energy efficiency measures. Today, 85% of primary energy
comes from non-renewable and fossil sources (coal, oil, etc.). These reserves are continually
diminishing with increasing consumption and will not exist for future generations.
Energy Conservation and Energy Efficiency are separate, but related concepts. Energy
conservation is achieved when growth of energy consumption is reduced, measured in
physical terms. Energy Conservation can, therefore, is the result of several processes or
developments, such as productivity increase or technological progress.
On the other hand Energy efficiency is achieved when energy intensity in a specific
product, process or area of production or consumption is reduced without affecting output,

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consumption or comfort levels. Promotion of energy efficiency will contribute to energy

conservation and is therefore an integral part of energy conservation promotional policies.
Energy efficiency is often viewed as a resource option like coal, oil or natural gas. It
provides additional economic value by preserving the resource base and reducing pollution.
For example, replacing traditional light bulbs with Compact Fluorescent Lamps (CFLs)
th
means you will use only 1/4 of the energy to light a room. Pollution levels also reduce by
the same amount. Energy Efficient Equipment uses less energy for same output and reduces
CO2emissions is shown in figure,

Incandescent Lamp 60W Compact fluorescent Lamp 15W

CO2Emission –65 g/hr CO2Emission –16 g/hr
The benefits of Energy conservation for various players are given in Figure,

The Energy Conservation Act, 2001 and its Features:-

Policy Framework – Energy Conservation Act – 2001
With the background of high energy saving potential and its benefits, bridging the gap
between demand and supply, reducing environmental emissions through energy saving, and

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to effectively overcome the barrier, the Government of India has enacted the Energy
Conservation Act – 2001.
The Act provides the much-needed legal framework and institutional arrangement for
embarking on an energy efficiency drive. Under the provisions of the Act, Bureau of Energy
st
Efficiency has been established with effect from 1 March 2002 by merging erstwhile Energy
Management Centre of Ministry of Power. The Bureau would be responsible for
implementation of policy programmers and coordination of implementation of energy
conservation activities.
Important features of the Energy Conservation Act are:
Standards and Labeling:-
Standards and Labeling (S & L) has been identified as a key activity for energy efficiency
improvement. The S & L program, when in place would ensure that only energy efficient
equipment and appliance would be made available to the consumers.
The main provision of EC act on Standards and Labeling are:
 Evolve minimum energy consumption and performance standards for notified
equipment and appliances.
 Prohibit manufacture, sale and import of such equipment, which does not conform to
the standards.
 Introduce a mandatory labeling scheme for notified equipment appliances to enable
consumers to make informed choices
 Disseminate information on the benefits to consumers
Designated Consumers:-
The main provisions of the EC Act on designated consumers are:
 The government would notify energy intensive industries and other establishments as
designated consumers;
 Schedule to the Act provides list of designated consumers which covered basically
energy intensive industries, Railways, Port Trust, Transport Sector, Power Stations,
Transmission & Distribution Companies and Commercial buildings or establishments;
 The designated consumer to get an energy audit conducted by an accredited energy
auditor;
 Energy managers with prescribed qualification are required to be appointed or
designated by the designated consumers;
 Designated consumers would comply with norms and standards of energy
consumption as prescribed by the central government.

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Certification of Energy Managers and Accreditation of Energy Auditing Firms:-

The main activities in this regard as envisaged in the Act are:
A cadre of professionally qualified energy managers and auditors with expertise in
policy analysis, project management, financing and implementation of energy efficiency
projects would be developed through Certification and Accreditation programmed.
BEE to design training modules, and conduct a National level examination for
certification of energy managers and energy auditors.
Energy Conservation Building Codes:-
The main provisions of the EC Act on Energy Conservation Building Codes are:
 The BEE would prepare guidelines for Energy Conservation Building Codes (ECBC);
 These would be notified to suit local climate conditions or other compelling factors by
the respective states for commercial buildings erected after the rules relating to energy
conservation building codes have been notified. In addition, these buildings should
have a connected load of 500 kW or contract demand of 600 kVA and above and are
intended to be used for commercial purposes;
 Energy audit of specific designated commercial building consumers would also be
prescribed.
Central Energy Conservation Fund:-
The EC Act provisions in this case are:
 The fund would be set up at the centre to develop the delivery mechanism for large-
scale adoption of energy efficiency services such as performance contracting and
promotion of energy service companies. The fund is expected to give a thrust to R &
D and demonstration in order to boost market penetration of efficient equipment and
appliances. It would support the creation of facilities for testing and development and
to promote consumer awareness.
Bureau of Energy Efficiency (BEE):-
 The mission of Bureau of Energy Efficiency is to institutionalize energy efficiency
services, enable delivery mechanisms in the country and provide leadership to energy
efficiency in all sectors of economy. The primary objective would be to reduce energy
intensity in the Indian Economy.
 The general superintendence, directions and management of the affairs of the Bureau
is vested in the Governing Council with 26 members. The Council is headed by Union
Minister of Power and consists of members represented by Secretaries of various line
Ministries, the CEOs of technical agencies under the Ministries, members

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representing equipment and appliance manufacturers, industry, architects, consumers

and five power regions representing the states. The Director General of the Bureau
shall be the ex-officio member-secretary of the Council.
 The BEE will be initially supported by the Central Government by way of grants
through budget, it will, however, in a period of 5-7 years become self-sufficient. It
would be authorized to collect appropriate fee in discharge of its functions assigned to
it. The BEE will also use the Central Energy Conservation Fund and other funds
raised from various sources for innovative financing of energy efficiency projects in
order to promote energy efficient investment.
Role of Bureau of Energy Efficiency:-
 The role of BEE would be to prepare standards and labels of appliances and
equipment, develop a list of designated consumers, specify certification and
accreditation procedure, prepare building codes, maintain Central EC fund and
undertake promotional activities in co-ordination with center and state level agencies.
The role would include development of Energy service companies (ESCOs),
transforming the market for energy efficiency and create awareness through measures
including clearing house.
Role of Central and State Governments:-
The following role of Central and State Government is envisaged in the Act
 Central - to notify rules and regulations under various provisions of the Act, provide
initial financial assistance to BEE and EC fund, Coordinate with various State
Governments for notification, enforcement, penalties and adjudication.
 State - to amend energy conservation building codes to suit the regional and local
climatic condition, to designate state level agency to coordinate, regulate and enforce
provisions of the Act and constitute a State Energy Conservation Fund for promotion
of energy efficiency.
Enforcement through Self-Regulation:-
E.C. Act would require inspection of only two items. The following procedure of self-
regulation is proposed to be adopted for verifying areas that require inspection of only two
items that require inspection.
 The certification of energy consumption norms and standards of production process
by the Accredited Energy Auditors is a way to enforce effective energy efficiency in
Designated Consumers.

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 For energy performance and standards, manufacturer’s declared values would be

checked in Accredited Laboratories by drawing sample from market. Any
manufacturer or consumer or consumer association can challenge the values of the
other manufacturer and bring to the notice of BEE. BEE can recognize for challenge
testing in disputed cases as a measure for self-regulation.
Penalties and Adjudication:-
 Penalty for each offence under the Act would be in monetary terms i.e. Rs.10,000 for
each offence and Rs.1,000 for each day for continued non Compliance.
 The initial phase of 5 years would be promotional and creating infrastructure for
implementation of Act. No penalties would be effective during this phase.
 The power to adjudicate has been vested with state Electricity Regulatory
Commission which shall appoint any one of its member to be an adjudicating officer
for holding an enquiry in connection with the penalty imposed.

1.4 CODES, STANDARDS & LEGISLATION:-

It presents an historical perspective on key codes, standards, and regulations which
have impacted energy policy and are still playing a major role in shaping energy usage. The
Energy Policy Act of 1992 is far reaching and its implementation is impacting electric power
deregulation, building codes and new energy efficient products.
Sometimes policy makers do not see the far reaching impact of their legislation. The
Energy Policy Act for example has created an environment for retail competition. Electric
utilities will drastically change the way they operate in order to provide power and lowest
cost. This in turn will drastically reduce utility sponsored incentive and rebate programs
which have influenced energy conservation adoption.
THE ENERGY POLICY ACT OF 1992:-
This comprehensive legislation is far reaching and impacts energy conservation,
power generation, and Alternative fuel vehicles as well as energy production. The federal as
well as private sectors are impacted by this comprehensive energy act. Highlights are
described below:
Energy Efficiency Provisions:-
Buildings
 Requires states to establish minimum commercial building energy codes and to
consider minimum residential codes based on current voluntary codes.

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Utilities
 Requires states to consider new regulatory standards that would: require utilities to
undertake integrated resource planning; allow efficiency programs to be at least as
profitable as new supply options; and encourage improvements in supply system
efficiency.
Equipment Standards
 Establishes efficiency standards for: commercial heating and air-conditioning
equipment; electric motors; and lamps.
 Gives the private sector an opportunity to establish voluntary efficiency
information/labeling programs for windows, office equipment and luminaries, or the
Dept. of Energy will establish such programs.
Renewable Energy
 Establishes a program for providing federal support on a competitive basis for
renewable energy technologies. Expands program to promote export of these
renewable energy technologies to emerging markets in developing countries.
Alternative Fuels
 Gives Dept. of Energy authority to require a private and municipal alternative fuel
fleet program starting in 1998. Provides a federal alternative fuel fleet program with
phased-in acquisition schedule; also provides state fleet program for large fleets in
large cities.
Electric Vehicles
 Establishes comprehensive program for the research and development, infrastructure
promotion, and vehicle demonstration for electric motor vehicles.
Electricity
 Removes obstacles to wholesale power competition in the Public Utilities Holding
Company Act by allowing both utilities and non-utilities to form exempt wholesale
generators without triggering the PUHCA restrictions.
Global Climate Change
 Directs the Energy Information Administration to establish a baseline inventory of
greenhouse gas emissions and establishes a program for the voluntary reporting of
those emissions. Directs the Dept. of Energy to prepare a report analyzing the
strategies for mitigating global climate change and to develop a least-cost energy
strategy for reducing the generation of greenhouse gases.

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Research and Development

 Directs the Dept. of Energy to undertake research and development on a wide range
of energy technologies, including: energy efficiency technologies, natural gas end-use
products, renewable energy resources, heating and cooling products, and electric
vehicles.

STATE CODE:-
 American Society of Heating, Refrigeration, and Air-conditioning Engineers
(ASHRAE).

MODEL ENERGY CODE:-

The nation’s model code organizations are,
 Council of American Building Officials (CABO),
 Building Officials and Code Administrators International (BOCA),
 International Conference of Building Officials (ICBO),
 Southern Building Codes Congress International (SBCCI),
 International Code Council (ICC).
 International Energy Conservation Code (IECC)

Others:-
 Federal Energy Management Implementation Act (FEMIA 1988)
 Occupational Safety and Health Administration (OSHA)
 United Nations Environment Program (UNEP)
 Federal Power Act
 Public Utility Regulatory Policies Act (PURPA)
 Natural Gas Policy Act (NGPA)
 Resource Conservation and Recovery Act of 1976 (RCRA)
 Public Utility Holding Company Act of 1935.

1.5 ENERGY AUDIT:-

The manufacturing industry in India, accounts for over 50% of total commercial
energy used in the country. Across the world, industry consumes about 1/3 of all natural
energy sources (Murphy & McKay, Energy Management, Butterworth Heinemann, London,
1982). The high levels of energy used in Indian Industry compared to similar industries in

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advanced countries, the increasing problems of availability of energy sources and their ever
escalating costs, strongly point to the immediate need for effective control on the use of
energy.
It is believed and often proved by actual studies that a reduction in energy
consumption by as much as 10-30% is a realizable goal in a large number of industries, by
better and effective energy management at unit level. And these savings can generally be
achieved with little or no additional investment.
Any savings that can be achieved in energy costs, directly add to the profit figures.
While this is also true, in respect of other direct costs as well, i.e. labour and material costs, it
is much harder and more difficult to achieve reduction in their costs.
Another area by which profitability of an enterprise can be improved is by increasing
production and market share; but these obviously require additional investments on
expansion of manufacturing facilities and man-power and involve added management and
marketing effort; and a small portion of increased sales volume contributes to profits.
While the situation from industry to industry may vary, it may be pertinent to state
that energy cost savings to the extent of 15-20% is definitely feasible, at least in those
industries (besides commercial buildings) where serious study has not yet been attempted.
One can visualize the improvement in profitability besides improvement in the
competitiveness of Indian manufactured goods in world market, which reduction in energy
costs could result in, without any major investment.

1.6 DEFINITIONS:-
The main purpose energy audit is to increase energy efficiency and reduce energy
related costs. Energy audit is not an exact science. It involves collection of detailed data and
its analysis.
(or)
It is an official scientific study/ survey of energy consumption of a region/
organization/ process/ plant/ equipment aimed at the reduction of energy consumption and
energy costs, without affecting productivity and comforts and suggesting methods for energy
conservation and reduction in energy costs.
(or)
An energy audit is an inspection, survey and analysis of energy flows for energy
conservation in a building, process (or) system to reduce the amount of energy input into the
system without negatively affecting the output(s).

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(or)
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 recommendations for improving energy efficiency with cost benefit
analysis and an action plan to reduce energy consumption".
(or)
Energy audit is an official survey or study of the energy consumption and its
objectives are to recommend steps for improving energy efficiencies, reducing the energy
costs and wastage, improving quality etc.

Energy audit is a fundamental part of an energy management program (EMP) in

controlling energy costs. It will identify areas of wasteful and inefficient use of energy.
In this Act, unless the context otherwise requires: -
(a) "Accredited energy auditor" means an auditor possessing qualifications specified under
clause (p) of sub-section (2) of section 13;
(b) "Appellate Tribunal" means Appellate Tribunal for Energy Conservation established
under section 30;
(c) "Building" means any structure or erection or part of a structure or erection, after the rules
relating to energy conservation building codes have been notified under clause (a) of section
15 of clause (l) of sub-section (2) of section 56, which is having a connected load of 500kW
or contract demand of 600 kVA and above and is intended to be used for commercial
purposes;
(d) "Bureau" means the Bureau of Energy Efficiency established under subsection (l) of
section 3;
(e) "Chairperson" means the Chairperson of the Governing council;
(f) "Designated agency" means any agency designated under clause (d) of section 15;
(g) "Designated consumer" means any consumer specified under clause (e) of section 14;
(h) "Energy" means any form of energy derived from fossil fuels, nuclear substances or
materials, hydro-electricity and includes electrical energy or electricity generated from
renewable sources of energy or bio-mass connected to the grid;
(i) "Energy audit" means the verification, monitoring and analysis of use of energy including
submission of technical report containing recommendations for improving energy efficiency
with cost benefit analysis and an action plan to reduce energy consumption;

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(j) "Energy conservation building codes" means the norms and standards of energy
consumption expressed in terms of per square meter of the area wherein energy is used and
include the location of the building;
(k) "Energy consumption standards" means the norms for process and energy consumption
standards specified under clause (a) of section 14;
(l) "Energy Management Centre" means the Energy Management Centre set up under the
Resolution of the Government of India in the erstwhile Ministry of Energy, Department of
Power No. 7(2)/87-EP (Vol. IV), dated the 5th July, 1989 and registered under the Societies
Registration Act, 1860; (21 of 1860)
(m) "Energy manager" means any individual possessing the qualifications prescribed under
clause (m) of section 14;
(n) " Governing Council" means the Governing Council referred to in section 4;
(o) "Member" means the member of the Governing Council and includes the Chairperson;
(p) "Notification" means a notification in the Gazette of India or, as the case may be, the
Official Gazette of a State;
(q) "Prescribed" means prescribed by rules made under this Act;
(r) "Regulations" means regulations made by the Bureau under this Act;
(s) "Schedule" means the Schedule of this Act;
(t) "State Commission" means the State Electricity Regulatory Commission established under
sub-section (l) of section 17 of the Electricity Regulatory Commissions Act, 1998; (14 of
1998)
(u) Words and expression used and not defined in this Act but defined in the Indian
Electricity Act, 1910 or the Electricity (Supply) Act, 1948 or the Electricity Regulatory
Commissions Act, 1998 shall have meanings respectively assigned to them in those Acts. (9
of 1940, 54 of 1948, 14 of 1998)

1.7 CONCEPTS:-
The successful implementation of individual energy conservation programmed
depends on a proper organizational framework and baseline data for identifying and
evaluating energy conservation opportunities. The determination of the baseline data requires
a comprehensive and detailed survey of energy uses, material-energy balances, and energy
loss. This survey is generally referred to as the Energy Audit.
To save energy, it is necessary to know where, how and how much energy is being
consumed. The objective of energy audits is to characterize and quantify the use of energy

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within the plant at various levels in departments, sections, major processes, and major
equipment. The plant energy study provides a comprehensive and detailed picture not only of
the type and quantity of energy being used but also how efficiently it is being utilized, and
where it is wasted or lost.
The energy audit process include description of energy inputs and product outputs by
major departments or by major processing functions, and will evaluate the energy; efficiency
of each step of the manufacturing process.
Means of improving these will be listed, and a preliminary assessment of the cost of
these improvements will be made to indicate the expected payback on any capital investment
needed.
The aims of energy audit are as follows:
1. To identify the main energy users and quantity their annual energy consumption.
2. To ascertain the optimized energy data
3. To determine the availability or energy/production data
4. To investigate the distribution systems for the site services and note any existing
metering
5. To prepare energy and process flow diagrams for the site
The Energy Audits are normally carried out in two phases, i.e., Preliminary Energy Audit
(PEA) and Detailed Energy Audit (DEA).

1.8 TYPES 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.
A) Preliminary Energy Audit (PEA)
B) Detailed Energy Audit (DEA)

A. Preliminary Energy Audit (PEA) / House Keeping Practices:-

Considerable savings are possible through small improvements in the “housekeeping”
practices, and the cumulative effect of many such small efficiency improvements could be
quite significant. These can identify by a short survey, observation and measurements. Many
energy conscious industries have already achieved considerable progress in this area.

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Approach to Preliminary Energy Audit (PEA)

This essentially involves preliminary data collection and analyses. The PEA is based
on collection of available data, analysis, observation, and inference based on experience and
judgment is carried out within a short time.
The PEA is the first step in implementing an energy conservation programmed, and
consists of essentially collecting and analyzing data without the use of sophisticated
instruments. The ability and experience on the part of Energy Auditor will influence the
degree of its success.
Normally the results of the audit would depend on:-

Experience of the auditor Availability and completeness of data

Physical size of the facility Depth of analysis of available data

Complexity of operations within the Awareness of energy matters within the

facility facility

Broadly, the audit is carried out in six steps:-

1. Organize resources
 Manpower / time frame
 Instrumentation
2. Identify data requirements
 Data forms
3. Collect data
A. Conduct informal interviews
 Senior management
 Energy manager/coordinator
 Plant engineer
 Operators and production management and personnel
 Administrative personnel
 Financial manager
B. Conduct plant walkthrough/visual inspection
 Material/energy flow through plant
 Major functional departments
 Any installed instrumentation, including utility meters
 Energy report procedures

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

 Production and operational reporting procedures

 Conservation opportunities
4. Analyze data
A. Develop data base
 Historical data for all energy suppliers
 Time frame basis
 Other related data
 Process flow sheets
 Energy consuming equipment inventory
B. Evaluate data
 Energy use consumption, cost, and schedules
 Energy consumption indices
 Plant operations
 Energy savings potential
 Plant energy management program
 Preliminary energy audit
5. Develop action plan
 Conservation opportunities for immediate implementation
 Projects for further study
 Resources for detailed energy audit
 Systems for test
 Instrumentation; portable and fixed
 Manpower requirements
 Time frame
 Refinement of corporate energy management programmed
6. Implementation
 Implement identified low cost/no cost projects
 Perform detailed audit
The preliminary energy audit is essentially, as the name implies a preliminary data
collection and its analysis process. Readily available data on the plants energy systems and
energy-using processes or equipment are obtained and studied. The operation and condition
of equipment are observed by going around the plant. These provide basis to develop

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recommendations for immediate short term measures and to provide quick and rough
estimates of savings that are possible and achievable.
A preliminary study usually identifies and assesses obvious areas for energy savings
such as stream leaks, compressed air leaks, poor or missing insulation, condensate recovery,
idling equipment, deterioration and deficiencies in combustion and heat transfer equipment
etc. and serves to identify specific areas for the detailed plant energy study.

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

B. Detailed Energy Audit (DEA):-

This would be a comprehensive energy efficiency study using portable energy
monitoring instruments. The essential part of this audit is carrying out various measurements
and analyses covering individually every significant energy consuming plant item/processes,
to determine their efficiencies and loss of energy at that point, and potential energy savings
are explored and crystallized, and every recommendation for investment is supported by
criteria such as pay-back analysis.
The detailed plant energy study is a comprehensive analyses evaluation of all aspects
of energy generation, distribution and utilization within the plant. At the plant level, the
analyses require time series data on a daily, monthly, or yearly basis, on the quantities of all
forms of primary energy flowing into the plant, e.g. coal, fuel oil, electricity, etc. and
production figures of major products, by products and waste products, at the department or
section level.
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

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Ten steps methodology for DEA:-

STEP
PLAN OF ACTION PURPOSE / RESULTS
No
Phase-I: Pre Phase Audit
Step-1  Plan and Organize  Resource planning, Establish/organize an
 Walk through Audit Energy audit team.
 Informal Interview with  Organize Instruments & time frame Macro
Energy Manager, Data collection (suitable to type of
Production / Plant industry.)
Manager  Familiarization of process/plant activities
 First hand observation & Assessment of
current level operation and practices.
Step-2 Conduct of brief meeting /  Building up cooperation
awareness programmed with  Issue questionnaire for each department
all divisional heads and  Orientation, awareness creation.
persons concerned (2-3 hrs.)
Phase-II: Audit Phase
Step-3 Primary data gathering,  Historic data analysis, Baseline data
Process Flow Diagram, & collection
Energy Utility Diagram  Prepare process flow charts
 All service utilities system diagram
(Example: Single line power distribution
diagram, water, compressed air & steam
distribution.
 Design, operating data and schedule of
operation
 Annual Energy Bill and energy
consumption pattern (Refer manual, log
sheet, name plate, interview)
Step-4 Conduct survey and  Measurements:
monitoring Motor survey, Insulation, and Lighting survey
with portable instruments for collection of more
and accurate data. Confirm and compare

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

operating data with design data.

Step-5 Conduct of detailed trials /  Trials/Experiments:
experiments for selected  24hours power monitoring (MD, PF, kWh
energy guzzlers etc.).
 Load variations trends in pumps, fan
compressors etc.
 Boiler/Efficiency trials for (4-8 hours)
 Furnace Efficiency trials Equipments
Performance experiments etc.,
Step-6 Analysis of energy use  Energy and Material balance & energy
loss/waste analysis.
Step-7 Identification and  Identification & Consolidation ENCON
development of Energy measures.
Conservation (ENCON)  Conceive, develop, and refine ideas
opportunities.  Review the previous ideas suggested by unit
personal
 Review the previous ideas suggested by
energy audit if any
 Use brainstorming and value analysis
techniques
 Contact vendors for new/efficient
technology.
Step-8 Cost benefit analysis  Assess technical feasibility, economic
viability and prioritization of ENCON
(Energy Conservation) options for
implementation.
Step-9 Reporting & Presentation to  Documentation, Report Presentation to the
the Top Management top Management.
Phase-III: Post Audit Phase Assist and Implement ENCON
Step-10 Implementation and Follow- recommendation measures and Monitor the
up performance
 Action plan, Schedule for implementation
 Follow-up and periodic review

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The duration of DEA studies depends on plant size and complexity. Whereas the
preliminary energy study can be carried out in a few days, the detailed study would require
anywhere from few weeks to months to years of effort.
Plant energy studies can be carried out in house if adequate resources and expertise
exist for doing so. Alternatively or additionally, external assistance may be sought from
energy consultants, equipment suppliers, and engineering and design firms, in either case,
intense interaction between plant personnel and the study team is essential for a proper
understanding and a meaningful analysis of the plants energy options.
Too often, the plant energy study is considered to be the consultant’s problem,
resulting in minimal inputs and involvement from plant personnel. This attitude is counter-
productive. Without the active participation of all levels, full benefits cannot be expected to
be accomplished.

1.9 ENERGY INDEX:-

Energy index is the figure obtained by dividing energy consumption by production output.

The index may be calculated weekly, monthly or annually.

Energy index is a useful parameter to “monitor and compare energy consumption of
specific products manufactured by the industry”.
Although the total energy indices are sufficient for monitoring purposes, a record of
the individual energy indices should be maintained. In the event of an increase or decrease
(due to perhaps a conservation measure) in energy index, the particular source can be
investigated immediately.
Energy may be purchased in various units, for example, coal in tons; gas in ft3,m3,
therms; oil in gallons, liters, tons, barrels etc. the relevant conversion units from one system
to the other are given below:
EXAMPLE: - To find the energy index we shown below example, here three types of energy
with energy consumption and also produces 100x103 tons of a particular product. Calculate
the energy index?
Energy type Consumption Energy (Wh)
Oil 10x103 gal 0520x109
gas 5x103 therm 0.146x109
Electricity 995x103 kwh 0.995x109

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

Total 1.661x109

ANS: - oil energy index is 0.520x109 wh/100x109 = 5.20x103 wh/ton of product

Gas energy index is 0.146x109 wh/100x109 = 1.46x103 wh/ton of product
` Electricity energy index is 0.995x109 wh/100x109 = 9.95x103 wh/ton of product
Total energy index is 1.661x109 wh/100x109 = 16.61x103 wh/ton of product

1.10 COST INDEX:-

The cost index is defined as the cost of energy divided by the production output.

The cost index is another parameter which can be used to “monitor and assess energy
consumption by a company”.
An individual cost index can be determined for each energy form and for the total
energy consumption by the company.
Same example for calculate the cost index in place of total energy, the cost will be used.

1.11 PIE CHART:-

Energy usage is plotted on a circular chart where the quantity of a particular type is
represented as a segment of a circle. The size of the segment will be depends upon the usages
of the product. For example, the company uses 25% of gas, 30% of the oil and 45% of the
electricity.

Sales

oil
gas
electricity

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1.12 SANKEY DIAGRAM:-

The sankey diagram represents all the primary energy flows in to a factory. The
widths of the bands are directly proportional to energy production, utilization and losses.
(or)
Sankey diagrams are a specific type of flow diagram, in which the width of the arrows
is shown proportionally to the flow quantity. They are typically used to
visualize energy or material or cost transfers between processes.
They are also commonly used to visualize the energy accounts or material flow
accounts on a regional or national level. Sankey diagrams put a visual emphasis on the major
transfers or flows within a system.
They are helpful in locating dominant contributions to an overall flow. Often, Sankey
diagrams show conserved quantities within defined system boundaries,
typically energy or mass, but they can also be used to show flows of non-conserved quantities
such as energy. Sankey Diagrams drop their arrows when energy is being used.
Following Figure shows a Sankey diagram which represents all the primary energy
flows into a factory. The widths of the bands are directly proportional to energy production
(source), utilization and losses.
The primary energy sources are gas, electricity and coal/oil (say, for steam
generation) and represent energy inputs at the left-hand side of the Sankey diagram.
For example the steam flows from input to output and also the electrical energy uses
by showing the sankey diagram is shown in below figure,

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

Boiler Power
Losses Steam Heating
House Losses
700
Losses 630 Losses
170
(650)

Oil Process A
(3850)
Steam (1700)
Gas
(700) Process B

(500)
Electricity
(500)

Boilers Office Power Lighting

(200) heating house (150)
(200) (150)

Energy Inputs: Oil, Gas, Electricity are represented in left

side 6
Sankey diagram representing energy usage (10 Joule per hour) by a
company

For the purpose of monitoring and checking energy consumption and usage on a
weekly or monthly basis, pie charts and Sankey diagram are relatively difficult. An
alternative method of monitoring energy consumption on a time-dependent basis is to use
load profiles.

1.13 LOAD PROFILES (HISTOGRAM):-

For the purpose of monitoring and checking energy consumption on a time dependent
basis is to use load profiles. In electrical engineering, a load profile is a graph of the variation
in the electrical load versus time.
A load profile will vary according to customer type (typical examples include
residential, commercial and industrial), temperature and holiday seasons.
The usages of oil, gas and electricity in a plant can be plotted on a graph as shown in
following Figure. The results illustrate seasonal variations and perhaps variations in
production schedules.
This technique has the major advantage that after a period of time, energy
consumption patterns emerge and it is possible to tell at a glance if an area is exceeding its

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

predicted value. An overall load profile equivalent to several pie charts and sankey diagrams
can be obtained by plotting the previous profiles can be also drawn.
Load factor — the ratio of the average load over the peak load. Peak load is normally the
maximum demand but may be the instantaneous peak. The load factor is between zero and
one. A load factor close to 1.0 indicates that the load runs almost constantly. A low load
factor indicates a more widely varying load. From the utility point of view, it is better to have
high load-factor loads. Load factor is normally found from the total energy used kilowatt-
hours.

Monthly Load Profile (kw) for electricity

usage
700

600

500

400

300

200

100

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly Load Profile (kw) for gas usage

350

300

250

200

150

100

50

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Monthly Load Profile (103 kw) for oil usage

700

600

500

400

300

200

100

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Load profiles can be determined by direct metering but on smaller devices such as
distribution network transformers this is not routinely done. Instead a load profile can be
inferred from customer billing or other data.
An example of a practical calculation used by utilities is using a transformer's
maximum demand reading and taking into account the known number of each customer type
supplied by these transformers. This process is called load research.

1.14 ENERGY CONSERVATION SCHEMES:-

Development of an energy conservation programmed can provide savings by reduced
energy use. However, it is economical to implement an energy conservation program only
when savings can offset implementation cost over a period of time.
Potential areas of conserving energy and a logical analysis of the methods or
techniques of conservation would provide a systematic and disciplined approach to the entire
conservation strategy as a sequel to the energy audit. Some established conservation trends
are replacement, retrofit, process innovation, fuel conversion and co-generation.
It is generally considered that investment for energy conservation should be judged by
exactly the same criteria as for any other form of capital investment. Energy conservation
measures may be classified on an economic basis and fall into the following three categories:

A) Short term: These measures usually involve changes in operating practices resulting in
little or no capital expenditure.

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

B) Medium term: Low-cost modifications and improvements to existing equipment where

the pay-back period is less than two years and often under one year.
C) Long term: Modifications involving high capital costs and which frequently involve the
implementation of new techniques and new technologies.
While the first two categories together can achieve savings of the order of 5-10%,
capital expenditure using existing and new technology may achieve a further 10-15%. It is
impossible to give a comprehensive list of all items in each category but selected examples
are given for each section.

A) Short-term energy conservation schemes:-

Items in this group can be considered as a tightening of operational control and
improved housekeeping.
a) Furnace efficiencies: greater emphasis should be placed on minimum excess
combustion air. Oxygen levels of flue gases should be continually monitored and
compared with target values. Oil burners must be cleaned and maintained regularly.
b) Heat exchangers: in the case of heat exchangers where useful heat is transferred
form product streams to feed streams, careful monitoring of performance should be
carried out to determine optimum cleaning cycles. Frequency of cleaning will
generally increase as a result, with consequent improved heat recovery.
c) Good housekeeping: doors and windows should be kept closed as much as possible
during the heating season. Wear natural light is sufficient, do not use artificial light.
Avoid excessive ventilation during the heating season. Encourage staff to wear
clothing appropriate to the temperature of the working areas.
d) Use of steam: major steam leaks should be repaired as soon as possible after they
occur: often a firm specializing in ‘on stream’ maintenance can be used. One crude
distillation columns where live steam is used for stripping purposes, the amount
required should be optimized and carefully controlled.
e) Electrical power: in industries where all the electrical power is ‘imported’,
conservation measures can reduce the annual electricity costs by 10-15%. Steam
driven turbines may prove more economical as prime movers. Natural air cooling may
be sufficient and therefore induced-draught fans may be taken out of commission.
Pumping costs can sometimes be saved by utilizing gravity to move products from
one tank to another. Where possible, use off-peak electricity.

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

B) Medium-term energy conservation schemes:-

Significant savings in energy consumption are often available for quite modest
outlays of capital based on a pay-back period of less than two years.
a) Insulation: Improving insulation to prevent cold air leaking into the building and
also, improving insulation of the steam distribution system. Many optimum insulation
thicknesses were determined at a time when fuel oil was £6 per tone and,
consequently, at present fuel oil prices, optimum thicknesses have increased
appreciable. In addition, in older plants lagging may have deteriorated to varying
degrees.
In one company, additional insulation was added to four boiler casing after
calculation had showed the structures could accept the increase in temperature. For an outlay
of £25000, savings of £60000 per annum were achieved.
In an oil refinery the lagging on the process steam system was up rated to new
optimum thicknesses and the £20000 invested in the project was recouped within a year.
b) Heating systems: Improving the time and temperature control of the heating systems
in buildings should result in substantial energy savings.
c) Replacing air compressors
d) Instrumentation: to measure and control the energy conservation parameters,
adequate instrumentation must be provided or operators will soon lose interest in
maintaining efficiencies if they are working with inadequate and unreliable
instruments.
e) Process modifications: Many of these schemes will depend on the nature of the
industry concerned, however, one general scheme will be considered. Steam
condensate, if uncontaminated, may be used as boiler feed water. Improved
condensate return systems can increase the amount recovered. The effect will be to
increase the heat recovered in the condensate and at the same time reduce raw water
and treatment costs.
In one instance 10000 kg h-1 of condensate was recovered for an investment of
£10000; the pay-back time was less than six months.
f) Burners: the control and amount of atomizing steam is important and often in
furnaces and boilers the amount of atomizing steam is far in excess of design.
In a hospital two fuel oil-fired boilers were examined and in some instances it was
found that 1 kg steam/kg fuel oil was being utilized. The oil burners were replaced and the

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

atomizing steam requirements are now 0.1 kg steam/kg fuel oil. The pay-back for an outlay
of £12000 was ten months.
g) Electrical Power Savings: considerable savings may be made by adjusting the
electrical power factor correction.
Capacitors were installed in one particular company at a cost of £10000. The power
factor was increased from 0.84 to 0.97 reducing the maximum demand level by over 14 per
cent. The pay-back time was nine months.
To increase plant capacity two feed pumps may be run in parallel to achieve the
required feed rate. When replacement, for mechanical reasons, becomes necessary it is more
economical to replace the pumps by a single pump having a higher capacity.

C) Long-term energy conservation schemes:-

To obtain further economics in energy consumption required the spending of
significant amounts of capital, although, in many cases, the return on capital for the long-term
investment may not be as good as that of the medium term.
Full financial evaluation is needed, using the appraisal techniques discussed in unit-V,
to ensure that investment is economically viable.
a) Heater modifications: the installation of heating tubes and air pre-heaters to extract
more heat from furnace flue gases.
b) Improved Insulation: Additional lagging of heated storage tanks. This type of
project often comes within the medium-term group.
c) Heat recovery: Improved heat recovery in the processing areas by additional heat
exchange schemes.
Many of the energy projects that have been outlined may be adopted by a wide variety
of companies. However, some are more specific in their application and it is necessary to
consider the contribution of energy costs to companies and energy usage by different
industries.

1.15 MEASUREMENTS IN ENERGY AUDITS:-

Even as much data and characteristics on equipment/systems can be obtained from the
energy audit personnel, the information may not be adequate to provide a full picture of their
operation. To obtain accurate operating conditions and operating performance of
equipment/systems, the auditor should have the necessary measuring instruments to take

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 EEE ENERGY AUDITING & DEMAND SIDE MANAGEMENT B.Tech

readings of corresponding parameters such as temperature, pressure, flow, lighting lux level,
running current, etc.
The requirement for an energy audit such as identification and quantification of
energy necessitates 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 and DC systems – Voltage (V), Current(I), Power
factor, Active power (kW), apparent power (demand) (kVA), Reactive power (kVA), Energy
consumption (kWh), Frequency (Hz),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, SOx, NOx, combustion efficiency etc.

1.16 PRESENTATION OF ENERGY AUDIT RESULTS:-

An energy audit is a key to assessing the energy performance of an industrial plant
and for developing an energy management program. The typical steps of an energy audit are:
i) Preparation and planning
ii) Data collection and review
iii) Plant surveys and system measurements
iv) Observation and review of operating practices
v) Data documentation and analysis
vi) Reporting of the results and recommendations.
An overview of the procedure for a detailed industrial energy audit is shown in
Figure. A preliminary audit (walk-through audit) contains some of the same steps of the
procedure shown, but the depth of the data collection and analysis might be different
depending on the scope and objectives of the audit.
Overall, there are three main steps (excluding the post-audit activities) each of which
has several sub-steps. These three main steps are energy audit preparation, execution, and
reporting.

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UNIT - II
ENERGY EFFICIENT MOTORS

2.1 ENERGY EFFICIENT MOTORS:-

In a commercial building, lighting is predominant user of as it is on for a major
portion of a day. However, electric motor driving pumps and air-handling fans may also
operate for a larger part of the time or even continuously. Therefore in industry, power used
by electric motors and other processes generally will be the larger user of electric power,
although lighting is still a major consumer.
“Energy-Efficient motors cost more than motor first cost (Standard Motor)”. On a life
cycle basis, electric motor efficiency can be far more important than motor first cost.
During the period from 1960 to 1975, electric motors, particularly those in the 1 to
250-hp range, were designed for minimum first cost. The amount of active material, i.e.,
lamination steel, copper or aluminum or magnet wire, and rotor aluminum, was selected as
the minimum levels required meeting the performance requirements of the motor. Efficiency
was maintained at levels high enough to meet the temperature rise requirements of the
particular motor. As a consequence, depending on the type of enclosure and ventilation
system, a wide range in efficiencies exists for standard NEMA (National Electrical
Manufacturers Association) design B poly-phase motors.
The minimum efficiency is the lowest level of efficiency to be expected when a motor
is marked with the nominal efficiency in accordance with the NEMA standard. This method
of identifying the motor efficiency takes into account variations in materials, manufacturing
processes, and test results in motor-to-motor efficiency variations for a given motor design.
The nominal efficiency represents a value that should be used to compute the energy
consumption of a motor or group of motors. For example, a standard 10-hp electric motor
may have an efficiency range of 81–88%.
At 81% efficiency,

Motor losses = 9210-7460 = 1750 W

At 88% efficiency,

Motor losses = 8477-7460 = 1077 W

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Therefore, for the same output the input can range from 8477 W to 9210 W, or an
increase in energy consumption and power costs of 8%, to operate the less efficient motor.

2.1.1. WHY MORE EFFICIENT MOTORS?

The escalation in the cost of electric power that began in 1972 made it increasingly
expensive to use inefficient electric motors. From 1972 through 1979, electric power rates
increased at an average annual rate of 11.5% per year. From 1979 to the present, the electric
power rates have continued to increase at an average annual rate of 6% per year. The annual
electric power cost to operate a 10-hp motor 4000 hr/yr increased from $850 in 1972 to
$1950 in 1980 and to over $2500 by 1989. By 1974, electric motor manufacturers were
looking for methods to improve three-phase induction motor efficiencies to values above
those for standard NEMA design B motors.
Unfortunately, there is no single definition of an energy effective motor. Similarly,
there are no efficiency standards for stand NEMA design B poly-phase induction motors.
Energy-efficient motors (EEM) are the ones in which, design improvements are incorporated
specifically to increase operating efficiency over motors of standard design (see Figure 2.1).
Design improvements focus on reducing intrinsic motor improvements focus on reducing
intrinsic motor losses. Improvements include the use of lower loss silicon steel, a longer core
(to increase active material), thicker wires (to reduce resistance), thinner laminations, smaller
air gap between stator and rotor, copper instead of aluminum bars in the rotor, superior
bearings and a smaller cooling fan, etc.,

Fig. 2.1 STANDARD (vs) HIGH EFFICIENCY MOTORS

(Typical 3- Induction Motor)
100
Efficiency (%)

90

80

70
1 51 101 151
Motor Rating (KW)

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Energy-efficient motors operate with efficiencies that are typically 4 to 6% higher

than the standard motors. In keeping with the stipulations of the BIS, energy-efficient motors
are designed to operate without loss in efficiency at loads between 75% and 100% of rated
capacity.
This may result in major benefits in varying load applications. The power factor is
about the same or may be higher than for standard motors. Furthermore, energy-efficient
motors have lower operating temperatures and noise levels, greater ability to accelerated
higher-inertia loads, and are less affected by supply voltage fluctuations.
Energy-efficient motors, also called premium or high- efficiency motors, are 2 to 8%
more efficient than standard motors. Motors qualify as "energy-efficient" if they meet or
exceed the efficiency levels listed in the National Electric Manufacturers Association's
(NEMA's).
Energy-efficient motors owe their higher performance to key design improvements
and more accurate manufacturing tolerances. Lengthening the core and using lower-
electrical-loss steel, thinner stator laminations, and more copper in the windings reduce
electrical losses. Improved bearings and a smaller, more aerodynamic cooling fan further
increase efficiency. Energy-efficient motors generally have longer insulation and bearing
lives, lower heat output, and less vibration. In addition, these motors are often more tolerant
of overload conditions and phase imbalance. This results in low failure rates, which has
prompted most manufacturers to offer longer warranties for their energy-efficient lines.
Purchasing an energy-efficient motor can dramatically cut energy costs.
The advantages are,
 Saves energy and money
 Near uniform efficiency from 50% to 100% of full load ensuring energy savings even
at part load conditions also
 Short payback period
 Substantial savings after payback period
The applications of an energy efficient motor are specially suited for industries which are
power intensive and equipments which run on constant load for long duration.

2.2 FACTORS AFFECTING EFFICIENCY AND LOSS

DISTRIBUTION:-
Motor efficiency is simply of the watts output divided by the watts input. This is
better expressed as the watts output minus the losses, divided by the watts input.

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The only way to improve efficiency is to reduce motor losses. The components of motor
losses can be broadly defined as no-load and load losses. The typical loss distribution for an
AC motor is shown in below as,
Percentage Motor Component’s Loss:
Sr.
Motor component Loss Total Loss %
No.
Stator I²R loss( copper
1. 37%
loss)
Rotor I²R loss( copper
2. 18%
loss)

3. Iron Loss 20%

4. Friction and Windage loss 9%

5. Stray Loss 16%

Description of Motor component’s Losses:

Copper Loss:
Depends on the effective resistance of motor winding:
- Caused by the current flowing through it.
- Is equal to I²R
- Proportional to Load.
- Is equal to I²R + Rotor I²R Loss.
Iron Loss:
Depending on the magnetic structure of the core and results from a combination of hysterisis
and eddy current effect due to changing magnetic fields in the motor’s core
- Voltage Related.
- Constant for any particular motor irrespective of load.
Friction and Windage loss:
- Occurs due to the friction in the bearing of the motor.
- The windage loss of the ventilation fan, other rotating element of the motor.

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- Depend on the bearing size, speed type of bearing, lubrication used and fan
blade profile.
- Constant for given speed irrespective of load.
Stray Loss:
It is very complex and Load related.
- Arises from harmonics and circulating current.
- Manufacturing process variations can also add to stray losses arises from
harmonics and circulating current.
- Manufacturing process variations can also add to stray losses.

SUMMARY OF LOSS DISTRIBUTION

Energy Efficient Motors
Energy efficient motors cover a wide range of ratings and the full load efficiencies are
higher by 3-7%. The mounting dimensions are also maintained as per IS1231 to enable easy
replacement. As a result of the modifications to improve performance, the costs of energy-
efficient motors are higher than those of standard motors by about 30%.
The higher cost will often be paid back rapidly in saved operating costs, particularly
in new applications or end-of-life motor replacements. In cases where existing motors have
not reached the end of their useful life, the economics will be less positive.
Because the favorable economics of energy-efficient motors are based on savings in
operating costs, there may be certain cases which are economically ill-suited to energy-
efficient motors.
These include highly intermittent duty or special torque applications such as hoists
and cranes, traction drives, punch presses, machine tools, and centrifuges.
In addition, energy efficient designs of multi-speed motors are generally not available.
Further, energy-efficient motors are not yet available for many special applications, e.g. for
flame-proof operation in oil-field or fire pumps or for very low speed applications (below 750
rpm). Also, most energy-efficient motors produced today are designed only for continuous
duty cycle operation.
Given the tendency of over-sizing on the one hand and ground realities like: Voltage,
Frequency variations, efficacy of rewinding in case of a burnout, on the other hand, benefits
of EEMs can be achieved only by careful selection, implementation, operation and
maintenance efforts of energy managers.

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Summary of energy efficiency improvements in EEMs is given in the following

Table. Within a limited range, the various motor losses discussed are independent of each
other. However, in trying to make major improvements in efficiency, one finds that the
various losses are very dependent.
The final motor design is a balance among several losses to obtain a high efficiency
and still meet other performance criteria, including locked-rotor torque, locked-rotor
amperes, breakdown torque, and the power factor.

Table: Energy Efficient Motors

Sr. No. Power Loss Area Efficiency Improvement

Use of more copper and larger conductors increases cross

sectional area of stator windings. This lowers resistance
1. Stator I2R
(R) of the windings and reduces losses due to current flow
(I)

Use of larger rotor conductor bars increases size of cross

2. Rotor I2R section, lowering conductor resistance (R) and losses due
to current flow (I)

Use of thinner gauge, lower loss core steel reduces eddy

3. Iron current losses. Longer core adds more steel to the design,
which reduces losses due to lower operating flux densities.

Friction & Use of low loss fan design reduces losses due to air
4.
Windage movement.

Use of optimized design and strict quality control

5. Stray Load Loss
procedures minimizes stray load losses.

2.3 CONSTRUCTIONAL DETAILS:-

The efficiency of energy efficient motors is higher due to the following constructional
features are,
1) By increasing the amount of copper in the motor (>60%) which reduces the resistance loss
in the winding & temperature rise. Performance improves because of increased thermal mass.
2) Use of more & thinner laminations of high quality motor steel reduces core losses in the
stator and rotor.

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3) Narrowing of air gap between stator and rotor increases the intensity of magnetic flux,
thereby improving the motor ability to deliver the same torque at reduced power. Increasing
the length of the stator and rotor increases the net flux linkages in the air gap to the same
effect.
4) More complex rotor bar designs enable good starting torque with efficient full speed
operation.
5) Improved overall design reduces windage losses and stray load losses.

Applications
Energy efficient motors hold their efficiency better at part loads enhancing their
advantage over standard motors. Economic benefits of installing energy efficient motors can
be recognized in three situations:
 In a new application (plant expansion)
 In lieu of rewinding of failed motors
 Proactive replacement for in-service standard motors
Energy efficient motors are more cost effective than standard motors in the above
cases. Efficiency of EEMs is 4-6% higher compared to the efficiency of standard motors.
Energy efficient motors run cooler, and therefore have potentially longer life than
their standard efficiency counterparts.

2.3.1. Three Phase (3- ) Induction Motors

In the integral horsepower sizes, i.e., above 1 hp, three-phase induction motors of
various types drive more industrial equipment than any other means. NEMA means National
Electrical Manufacturers Association.
The most common three-phase (polyphase) induction motors fall within the following
major types:
NEMA design B: Normal torques, normal slip, normal locked amperes
NEMA design A: High torques, low slip, high locked amperes
NEMA design C: High torques, normal slip, normal locked amperes
NEMA design D: High locked-rotor torque, high slip
Wound-rotor: Characteristics depend on external resistance
Multispeed: Characteristics depend on design-variable torque, constant torque, and
constant Horsepower

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There are many specially designed electric motors with unique characteristics to meet
specific needs. However, the majority of needs can be met with the preceding motors.

2.3.1.1. NEMA Design B Motors

The NEMA design B motor is the basic integral horsepower motor. It is a three-phase
motor designed with normal torque and normal starting current and generally has a slip at the
rated load of less than 4%. Thus, the motor speed in revolutions per minute is 96% or more of
the synchronous speed for the motor.
For example, a four-pole motor operating on a 60-Hz line frequency has a
synchronous speed of 1800 rpm or a full-load speed of
1800 – (1800 x Slip) = 1800 – (1800 x 0.04)
= 1800 – 72
= 1728 rpm
(or)
1800 x 0.96 = 1728 rpm
In general, most three-phase motors in the 1- to 200-hp range have a slip at the rated
load of approximately 3% or, in the case of four-pole motors, a full-load speed of 1745 rpm.
Figure 2.2 shows the typical construction for a totally enclosed, fan-cooled NEMA design B
motor with a die-cast aluminum single-cage rotor.

FIGURE 2.2 NEMA design B totally enclosed, fan-cooled poly-phase induction motor.
Figure 2.3 shows the typical speed-torque curve for the NEMA design B motor. This
type of motor has moderate starting torque, a pull-up torque exceeding the full-load torque,
and a breakdown torque (or maximum torque) several times the full-load torque.
Thus, it can provide starting and smooth acceleration for most loads and, in addition,
can sustain temporary peak loads without stalling.
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Fig 2.3 NEMA design B motor speed-torque curve

2.3.1.2. NEMA Design A Motors
The NEMA design A motor is a poly-phase, squirrel-cage induction motor designed
with torques and locked-rotor current that exceed the corresponding values for NEMA design
B motors. The criterion for classification as a design A motor is that the value of the locked-
rotor current be in excess of the value for NEMA design B motors. The NEMA design A
motor is usually applied to special applications that cannot be served by NEMA design B
motors, and most often these applications require motors with higher than normal breakdown
torques to meet the requirements of high transient or short-duration loads. The NEMA design
A motor is also applied to loads requiring extremely low slip, on the order of 1% or less.
2.3.1.3. NEMA Design C Motors
The NEMA design C motors are a squirrel-cage induction motor that develops high locked-
rotor torques for hard-to-start applications. Figure 2.4 shows the construction of a drip-proof
NEMA design C motor with a double-cage, die-cast aluminum rotor. Figure 2.5 shows the
typical speed torque curve for the NEMA design C motor. These motors have a slip at the
rated load of less than 5%.

FIGURE 2.4 NEMA design C drip-proof polyphase induction motor.

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FIGURE 2.5 NEMA design C motor speed-torque curve.

2.3.1.4. NEMA Design D Motors
The NEMA design D motor combines high locked-rotor torque with high full-load
slip. Two standard designs are generally offered, one with full-load slip of 5–8 % and the
other with full-load slip of 8–13%. The locked-rotor torque for both types is generally 275–
300% of full-load torque; however, for special applications, the locked-rotor torque can be
higher. Figure 2.6 shows the typical speed-torque curves for NEMA design D motors. These
motors are recommended for cyclical loads such as those found in punch presses, which have
stored energy systems in the form of flywheels to average the motor load and are excellent
for loads of short duration with frequent starts and stops.

FIGURE 2.6 NEMA design D motor speed-torque curves: 5–8% and 8–13% slip.
The proper application of this type of motor requires detailed information about the
system inertia, duty cycle, and operating load as well as the motor characteristics. With this

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information, the motors are selected and applied on the basis of their thermal capacity.
2.3.1.5. Wound-Rotor Induction Motors

FIGURE 2.7 Wound-rotor motor speed-torque curves: 1, rotor short-circuited;

2–4, increasing values of external resistance.
The wound-rotor induction motor is an induction motor in which the secondary (or
rotating) winding is an insulated polyphase winding similar to the stator winding. The rotor
winding generally terminates at collector rings on the rotor, and stationary brushes are in
contact with each collector ring to provide access to the rotor circuit. A number of systems
are available to control the secondary resistance of the motor and hence the motor’s
characteristics. The use and application of wound-rotor induction motors have been limited
mostly to hoist and crane applications and special speed-control applications. Typical wound-
rotor motor speed-torque curves for various values of resistance inserted in the rotor circuit
are shown in Fig. 2.7.
As the value of resistance is increased, the characteristic of the speed-torque curve
progresses from curve 1 with no external resistance to curve 4 with high external resistance.
With appropriate control equipment, the characteristics of the motor can be changed by
changing this value of external rotor resistance. Solid-state inverter systems have been
developed that, when connected in the rotor circuit instead of resistors, return the slip loss of
the motor to the power line. This system substantially improves the efficiency of the wound-
rotor motor used in variable-speed applications.

2.3.1.6 Multispeed Motors

Motors that operate at more than one speed, with characteristics similar to those of the
NEMA-type single-speed motors, are also available. The multispeed induction motors usually

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have one or two primary windings. In one-winding motors, the ratio of the two speeds must
be 2 to 1; for example, possible speed combinations are 3600/1800, 1800/900, and 1200/600
rpm.
In two-winding motors, the ratio of the speeds can be any combination within certain
design limits, depending on the number of winding slots in the stator. The most popular
combinations are 1800/1200, 1800/900, and 1800/600 rpm. In addition, two-winding motors
can be wound to provide two speeds on each winding; this makes it possible for the motor to
operate at four speeds, for example, 3600/1800 rpm on one winding and 1200/600 rpm on the
other winding. Multispeed motors are available with the following torque characteristics.
Variable Torque:
The variable-torque multispeed motor has a torque output that varies directly with the
speed, and hence the horsepower output varies with the square of the speed. This motor is
commonly used with fans, blowers, and centrifugal pumps to control the output of the driven
device.
Constant Torque:
The constant-torque multispeed motor has a torque output that is the same at all
speeds, and hence the horsepower output varies directly with the speed. This motor can be
used with friction-type loads such as those found on conveyors to control the conveyor speed.
Constant Horsepower:
The constant-horsepower multispeed motor has the same horsepower output at all
speeds. This type of motor is used for machine tool applications that require higher torques at
lower speeds.
Note:
The construction details of Energy Efficient Motors (EEM) i.e., efficient or high
efficiency 3- Induction motors are shown above. Similar for other type of machines also but
the design changes have been made to the normal standard motors.

2.4 CHARACTERISTICS - VARIABLE SPEED, VARIABLE DUTY

CYCLE SYSTEMS:-
The single most potent source of energy savings in induction motor system lies not in
the motor, but rather in the controls that govern its operation. Adjustable speed, intelligent
controls and other ways of modifying or controlling motor behavior hold great promise for
improving performance and efficiency in drive systems. Controlling motor speed to
correspond to load requirements provides many benefits, including increased energy
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efficiency and improved power factor. Adjustable speed capability can significantly improve
productivity of many manufacturing processes by reducing scrap, enabling quality
manufacturing during transition times and allowing more control over start up and shut down.
Following are the benefits of variable speed drives (VSD):
1) Matching motor and load to the output
2) Improved power factor
3) Improved process precision
4) Faster response
5) Extend operating range
6) increased production & flexibility
7) Improved tool life.
8) Electrical isolation
9) Cube-law load savings (P α N3)
10) Throttled load saving (throttling is the most energy inefficient operation)
11) Driving multiple motors
In addition, the basis of rating specifies the type of duty:
 Continuous duty
 Intermittent duty
 Varying duty
It is desirable to use standard motors for as many different applications as possible.
Consequently, general-purpose continuous rated motors should be used when
1. The peak momentary overloads do not exceed 75% of the breakdown torque
2. The root-mean-square (rms) value of the motor losses over an extended period of
time does not exceed the losses at the service factor rating
3. The duration of any overload does not raise the momentary peak temperature
above a value safe for the motor’s insulation system
In many applications, the load imposed on the driving motor varies from no load to a
peak load. When the motor load fluctuates, the temperature rise of the motor fluctuates.
When there is a definite repeated load cycle, the motor size selection can be based on the rms
value of motor losses for the load cycle.
However, normally, the losses at each increment of the load cycle are not available to
the user. Therefore, a good approximation for the motor size selection can be based on the
rms horsepower for the load cycle. The rms horsepower is then defined as that equivalent
steady-state horsepower that would result in the same temperature rise as that of the defined

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load cycle. When making the rms calculation, it is assumed that, when the motor is running,
the heat dissipation is 100% effective.
However, when the motor is at standstill, the heat dissipation is severely reduced and
is limited to dissipation by radiation and natural convection. This can be compensated for by
using an effective cooling time at standstill of one-fourth of the total standstill time.
An important word of caution:
This method of selecting electric motors is not satisfactory for applications
requiring frequent starting or plug reversing or systems with a high load inertia.

2.5 RMS HORSEPOWER (RMS HP):-

The root-mean-square (RMS) value of the horsepower over one cycle can be
calculated to estimate the possible heating effect on the motor. The RMS horsepower is the
square root of the sums of the horsepower squared, multiplied by the time per horsepower;
divided by the sums of all the time intervals.
To determine the RMS load on the motor, use the following equation:

P t P t P t P t Pn tn
MS P
t t t t tn

As long as the RMS horsepower does not exceed the full load horsepower of the
motor used in the application, the motor should not overheat.
This, of course, is only true as long as there is adequate ventilation during the entire
cycle. To keep it simple, we have disregarded the effect of acceleration time on a self-
ventilated motor.
Example…

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Another example:-

2.6 VOLTAGE VARIATION-VOLTAGE UNBALANCE:-

Voltage variation:-
National Electrical Manufacturers Association (NEMA) standard recognizes the effect
of voltage and frequency variation on electric motor performance.
The standard recommends that the voltage deviation from the motor rated voltage not
exceed 10% at the rated frequency. The rated motor voltage has been selected to match the
utilization voltage available at the motor terminals.
This voltage allows for the voltage drop in the power distribution system and for
voltage variation as the system load changes.

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The basis of the NEMA standard rated motor voltages for three phase 60 Hz induction
motors is as follows:
System voltage rated motor voltage
208 200
240 230
480 460
600 575
Voltage unbalance:-
Voltage unbalance can be more detrimental than voltage variation to motor
performance and motor life. When the line voltages applied to a polyphase induction motor
are not equal in magnitude and phase angle, unbalanced currents in the stator windings will
result. A small percentage voltage unbalance will produce a much larger percentage current
unbalance.
Some of the causes of voltage unbalance are the following:
1) An open circuit in the primary distribution system.
2) A combination of single phase and three phase loads on the same distribution system, with
the single phase loads unequally distributed.
Percentage Voltage Unbalance is defined by NEMA as 100 times the deviation of the
line Voltage from the average voltage divided by the average voltage. If the measured
voltages are 420, 430 and 440V, the average is 430V and the deviation is 10V. The
Percentage Unbalance is given by,

( or )
Voltage unbalance is defined as the NEMA as 100 times the absolute value of the
maximum deviation of the line voltage from the average voltage on a three phase system
divided by the average voltage.

1% voltage unbalance will increase the motor losses by 5%. Fig shows the increase in motor
losses due to voltage unbalance.

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Figure: Effect of voltage unbalance on motor losses

2.7 OVER MOTORING:-

“ ating of motor is higher than the required rating of the motor is called over
motoring”.
In many instances, the practice has been to over motor an application, i.e., to select a
higher horsepower motor than necessary. The disadvantages of this practice are,
 Lower efficiency
 Lower power factor
 Higher motor cost
 Higher controller cost
 Higher installation costs.

2.8 MOTOR ENERGY AUDIT:-

The Electrical Motor Energy Audit is the collection of actual electrical motor load
data including: voltage, current, active power, total power, reactive power, and power factor
under normal operating conditions.
Average Energy Conservation ranges from 3 -35% depending on motor load
conditions and will always be dependent upon the load. Motor applications that are under
loaded or oversized have more electrical losses and therefore more potential for Energy
Conservation and dollar savings. If necessary an additional Electrical Motor Energy Audit
can be conducted following Implementation to verify the actual Energy Conservation and
dollar savings. The verification process simply entails the collection of an average baseline
motor load sample (before process) followed by another comparable average motor load
sample with the ECI method (after process), and the evaluation of the difference. Energy
Conservation is realized immediately upon Implementation.

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The process of electric motor management as,

 Save energy
 Reduce operating costs
 Minimize downtime
 Increase productivity.
Five Basic Concepts of Energy conservation in Drive Power are as follows:
 Drive power is huge – Think big ,
 Motors are part of a system – Think systems,
 Optimize the application & process – Deliver service,
 The further the downstream savings, the higher is the upstream benefits –
Start down stream,
 Pursue integrated packages of savings opportunities rather than isolated
measures because many savings are Inter – Dependent – Integrate measures.

2.9 POWER FACTOR:-

The power factor of an AC electrical power system is defined as the ratio of the real
power flowing to the load to the apparent power in the circuit.
(or)
Power factor is defined as the ratio of real power (kw) to the apparent power (kvA)
and cosine of the angle by which the current lags (or leads) the voltage.

It is a dimensionless number between 0 and 1. Real power is the capacity of the circuit
for performing work in a particular time. Apparent power is the product of the current and
voltage of the circuit. Due to energy stored in the load and returned to the source, or due to a
non-linear load that distorts the wave shape of the current drawn from the source, the
apparent power will be greater than the real power. In an electric power system, a load with a

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low power factor draws more current than a load with a high power factor for the same
amount of useful power transferred.
The higher currents increase the energy lost in the distribution system, and require
larger wires and other equipment. Because of the costs of larger equipment and wasted
energy, electrical utilities will usually charge a higher cost to industrial or commercial
customers where there is a low power factor. Linear loads with low power factor (such
as induction motors) can be corrected with a passive network of capacitors or inductors. Non-
linear loads, such as rectifiers, distort the current drawn from the system. In such cases, active
or passive power factor correction may be used to counteract the distortion and raise the
power factor.
The devices for correction of the power factor may be at a central substation, spread
out over a distribution system, or built into power-consuming equipment.
AC power flow has the three components: real power (also known as active power)
(P), measured in watts (W); apparent power (S), measured in volt-amperes (VA); and reactive
power (Q), measured in reactive volt-amperes (var).
The power factor is defined as: active power/apparent power
In the case of a perfectly sinusoidal waveform, P, Q and S can be expressed as vectors that
form a vector triangle such that:

If φ is the phase angle between the current and voltage, then the power factor is equal to
the cosine of the angle, |cosφ|, and:

Since the units are consistent, the power factor is by definition a dimensionless
number between 0 and 1. When power factor is equal to 0, the energy flow is entirely
reactive, and stored energy in the load returns to the source on each cycle. When the power
factor is 1, all the energy supplied by the source is consumed by the load. Power factors are
usually stated as "leading" or "lagging" to show the sign of the phase angle.

2.10 METHODS OF IMPROVEMENT:-

The most practical and economical power factor improvement device is the capacitor.
As stated previously, all inductive loads produce inductive reactive power (lagging by a
phase angle of 90°). Capacitors on the other hand produce capacitive reactive power, which is
the exact opposite of inductive reactive power. In this instance, the current peak occurs before
the voltage peak, leading by a phase angle of 90°. By careful selection of capacitance

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required, it is possible totally cancel out the inductive reactive power when placed in circuit
together.
To prevent the continual flow of reactive current back and forth between the load and
power station, a capacitor, which is in effect a reactive current storage device, is connected in
parallel with the load. The reactive current supplied by the power station and used for the
magnetic force when the load is switched on does not now return to the power station but
instead flows into the capacitor and merely circulates between the latter and the load.
Consequently the distribution lines from the power station are relieved of the reactive current.
Capacitors can therefore be utilized to reduce kVA and electrical costs. Improved power
factor results in:
1. Reduced kVA charges
2. Improved plant efficiency
3. Additional loads can be added to the system
4. Reduced overloading of cables, transformers, switchgear, etc.
5. Improved starting torque of motors
6. Reduce fuel requirements to generate power due to lower losses.

Cosϕ1 is the kVA used before Power Factor Improvement equipment was added to the
network.
Cosϕ2 is the kVA used after Power Factor improvement equipment was added to the
network.

2.11 LOCATION OF CAPACITORS:-

In general, capacitor banks are installed in power systems for voltage support, power
factor correction, reactive power control, loss reduction, system capacity increase, and billing
charge reduction. This process involves determining capacitor size, location, control method,
and connection type (star or Delta).

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The main effort usually is to determine capacitor size and location for voltage support
and power factor correction. Secondary considerations are harmonics and switching
transients.
Any installation including the following types of machinery or equipment is likely to have
low power factor which can be corrected, with a consequent saving in charges, by way of
reduced demand charges, lesser low power factor penalties:
1. Induction motors of all types (which from by far the greatest industrial load on a. c. mains).
2. Power thyristor installation (for d.c. motor control and electro-chemical processes).
3. Power transformers and voltage regulators.
4. Welding machines
5. Electric-arc and induction furnaces.
6. Choke coils and magnetic system.
7. Neon sins and fluorescent lighting.
There are different methods for determining capacitor size and location.
1. The most common method (intuitive) is based on rules of thumb followed by running
multiple load flow studies for fine-tuning the size and location. This method may not yield
the optimal solution and can be very time consuming and impractical for large systems.
2. The second method is to use the ETAP Optimal Power Flow (OPF) program to optimize
the capacitor sizes based on the candidate locations selected by the engineer. This method
requires per-selected locations, since OPF can optimize the capacitor sizes but not the
locations.
3. The most effective method is to use the Optimal Capacitor Placement (OCP) program to
optimize capacitor sizes and locations with cost considerations. OCP employs a genetic
algorithm, which is an optimization technique based on the theory of nature selection. OCP
uses the “Present worth Method” to do alternative comparisons. It considers initial
installation and operating costs, which includes maintenance, depreciation, and interest rate.
Two methods of improving power factor using capacitors are:
a) Individual motor compensation (static capacitors)
b) Centralized compensation (automatic capacitor banks)
a) Individual Motor Compensation:-
Most effective correction is obtained by connecting individual capacitors directly to
the terminals of each motor. The motor and capacitor can be controlled jointly by the motor
switchgear. The capacitor rating should be matched as closely as possible so that the power

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factor of the entire plant can be corrected to the optimum value, irrespective of the number of
motors switched on.
If the magnetizing current is not known, 95% of the motor no-load current can be
used as an approximate value. Care should be taken not to exceed the value calculated to
avoid dangerous overvoltages and possible self excitation of motors at switch-off. Over
compensation can cause higher supply voltages which can cause consequent break down of
motor insulation and flashover at motor terminals. To be safe, rather use standard capacitor
sizes (as indicated below). For this reason, individual motor compensation is not
recommended for motors which are rapidly reversed e.g. cranes, hoists, etc.
b) Centralized Compensation (Automatic Power Factor Correction):-
In large industrial plants where many motors are generally in use or, when the main
reason for power factor is to obtain lower electricity bills, then centralized compensation is
far more practical and economical than individual motor compensation. In this instance, large
banks or racks of capacitors are installed at the main incoming distribution boards of the plant
and are sub-divided into steps which are automatically switched in or out depending on
specific load requirements by means of an automatic control system, improving the overall
power factor of the network. Generally an automatic power factor system consists of:
a) A main load-break isolator (or circuit breaker)
b) An automatic reactive control relay
c) Power factor capacitors backed by suitable fuse protection
d) Suitably rated contactors for capacitor switching
The automatic reactive control relay monitors the total network and will switch-in the
required capacitor banks at pre-determined intervals compensating for capacitor discharge
times and load dependant requirements. As capacitor switching subject’s components to
exceptionally high stresses it is imperative to correctly size and rate all components utilized
in a system.

2.12 PF WITH NON LINEAR LOADS:-

The growing use of power semiconductors has increased the complexity of system
power factor and its correction. These power semiconductors are used in equipment such as
Rectifiers (converters), DC motor drive systems, Adjustable-frequency AC drive systems,
Solid-state motor starters, Electric heating.
In the earlier discussion about the power factor in sinusoidal systems, only two
components of power contributed to the total kilovolt-amperes and the resultant power factor:

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the active or real component, expressed in kilowatts, and the reactive component, expressed
in kilovars. When nonlinear loads using power semiconductors are used in the power system,
the total power factor is made up of three components:
1. Active, or real, component, expressed in kilowatts.
2. Displacement component, of the fundamental reactive elements, expressed in
kilovars or kilovolt-amperes.
3. Harmonic component.
The result of the harmonics and the distorted sinusoidal current and voltage
waveforms generated when any type of power semiconductor is used in the power circuit, the
harmonic component can be expressed in kilovars or kilovolt-amperes. The effect of these
nonlinear loads on the distribution system depends on,
(1) The magnitude of the harmonics generated by these loads,
(2) The percent of the total plant load that is generating harmonies, and
(3) The ratio of the short-circuit current available to the nominal fundamental load
current.
Generally speaking, the higher the ratio of short-circuit current to nominal
fundamental load current, the higher the acceptable level of harmonic distortion.
Therefore, more precise definitions of power factors are required for systems with nonlinear
loads as follow:
Displacement power factor: The
ratio of the active power of the
fundamental in kilowatts to the
apparent power of the fundamental in
kilovolt-amperes.
Total power factor: The ratio of the active power
of the fundamental in kilowatts to the total kilovolt-
amperes.
Distortion factor (or) harmonic factor: The ratio
of the root-mean-square (RMS) value of all the
harmonics to the root-mean-square value of the
fundamental. This factor can be calculated for both
the voltage and current.
Applies to those ac loads where the current is not proportional to the voltage.
Foremost among loads meeting their definition is gas discharge lighting having saturated

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ballast coils and thyristor (SCR) controlled loads. The nature of non-linear loads is to
generate harmonics in the current waveform. This distortion of the current waveform leads to
distortion of the voltage waveform. Under these conditions, the voltage waveform is no
longer proportional to the current. Non Linear Loads are: COMPUTER, LASER PRINTERS,
SMPS, REACTIFIER, PLC, ELECTRONIC BALLAST, REFRIGERATOR, TV ETC.

2.13 EFFECT OF HARMONICS ON P.F:-

But for many applications, the classic triangle is oversimplified. That’s because it
does not take into account the effects of harmonic voltages and currents found in today’s
power-distribution systems. Harmonics add a third dimension to the classic power-factor
triangle, thereby increasing the apparent power required to do a particular amount of work.
The presence of harmonics requires that you change the way you think about–and the way
you measure–power factor.
When active power is divided by apparent power in the presence of harmonics, the result is
known as total power factor (PF). The component of power factor not contributed by
harmonics is known as displacement power factor (DPF). Note that PF and DPF are equal in
completely linear circuits–such as a 208-V, 3-phase induction motor operating a blower–but
are different in non- linear circuits, for example a variable-frequency drive controlling
cooling-tower fans.
O&M personnel should understand three practical effects of the PF/DPF definitions: (1)
The difference between PF and DPF readings is proportional to the degree of harmonics in
the power distribution system; (2) a power meter must provide both PF and DPF readings in
order to effectively troubleshoot systems with harmonics; and (3) manufacturers of nonlinear
equipment often provide only a single power-factor specification for their equipment, and it
may be unclear whether the specification refers to PF or DPF.
If PF and DPF differ by a factor of 10% or more, the difference is probably caused by
harmonics. The degree of difference may also suggest a course of action, depending on the
types of loads in the system.
Case 1: Predominantly linear systems. When PF and DPF are essentially the same value,
motors or other linear loads dominate the circuit. In this case, low power factor can be
compensated for with kVAr correction capacitance. Use caution in diagnosing problems
involving both low power factor and harmonics, because kVAr capacitors may be only part
of the solution. Even in systems with low levels of harmonics, kVAr capacitors applied
improperly can cause resonant conditions that can lead to overvoltages.

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Case 2: Predominantly nonlinear systems. When PF is significantly lower than DPF

correct low power factor by applying line reactors directly to the sources of harmonic current
or by using kVAr capacitor networks with series inductors to limit harmonic current in the
capacitors. Always exercise caution in the use of kVAr correction capacitors and
compensating filters to avoid resonance problems at harmonic frequencies and consult the
capacitor manufacturer or an expert in filter design.
Case 3: Systems with kVAr capacitors already installed. When variable-frequency drives
are added to existing motors, and kVAr correction capacitors are already installed, DPF can
actually be overcorrected, causing current to lead voltage. Without system modifications,
these new components might cause instability and overvoltage problems. Under these
conditions take readings in the circuit to determine whether it is necessary to remove the
kVAr correction capacitors.
Users can measure both PF and DPF with a single meter. The best ones show three views of
the measured signal: a numeric reading of signal parameters, a visual display of the
waveform, and a view of the entire harmonic spectrum.

2.14 P.F MOTOR CONTROLLERS:-

Electric motor savings are achieved in several ways. The first is in the motor design
itself, through the use of better materials, design, and construction. Another is by optimizing
the mechanical angle between the various rotating magnetic fields inside the motor. This is
done using the newer family of motor control algorithms, generally referred to together as
space vector control, flux vector control, or field-oriented control. By keeping the magnetic
fields of the rotor and stator oriented with the optimal angles between them under various
speed and torque conditions (typically near 90 degrees), the motor can always be operated at
peak efficiency. As a side benefit, other characteristics can also be optimized, such as fast and
stable dynamic response to load changes, precise control of speed or torque, soft starting and
braking, prevention of stalling at low speeds, high starting torques, and fault detection; often
without sacrificing much in the way of overall energy efficiency. Some of these features were
once obtainable only from a more expensive motor type, but can be achieved with the now
ubiquitous, low-cost, and reliable AC induction motor, which comprises 90 percent of U.S.
motor sales. One of the most significant advantages of the newer control algorithms is
efficient variable speed operation.
A very large opportunity for system-level energy savings comes from using variable
speed motor drives. A well-designed pump or fan motor running at half the speed consumes

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only one-eighth the energy compared to running at full speed. Many older pump and fan
installations used fixed-speed motors connected directly to the power mains, and controlled
the liquid or air flow using throttling valves or air dampers. The valves or dampers create a
back pressure, reducing the flow, but at the expense of efficiency. This is probably how the
HVAC forced-air system works in your office building; dampers control the airflow into each
workspace while the central fan, which is sized for peak requirements, runs at full speed all
the time—even if the combined airflow requirements of the building are currently very low.
Replacing these motors with variable speed drives and eliminating or controlling the dampers
more intelligently can save up to two-thirds their overall energy consumption.

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UNIT III
LIGHTING AND ENERGY INSTRUMENTS FOR AUDIT
3.1 LIGHTING INTRODUCTION:-
In today’s cost-competitive, market-driven economy, everyone is seeking
technologies or methods to reduce energy expenses and environmental impact. Because
nearly all buildings have lights, lighting retrofits are very common and generally offer an
attractive return on investment.
“Lighting” is good lighting when it provides adequate illuminance to enable the task
to be performed efficiently, is perceived as comfortable, and people have a high level of
satisfaction. Good lighting design is not simply about achieving a required illuminance on the
working plane; it is about creating and controlling the lit environment.
Standards often specify lighting in terms of the illumination on the horizontal plane,
which is the amount of light falling onto a horizontal surface. (Figure 1) This is because it is
easy to measure and easy to calculate. It is not a good indicator of the visual environment
however, as people generally judge the adequacy of the lighting by the luminance or relative
brightness of the vertical surfaces.
The luminance is the amount of light that leaves a surface, either by transmission
through the material or, more commonly, reflection from the surface. (Figure 2) In simple
terms, the luminance is the product of the illuminance and the reflectance of the surface
divided by π. The eye sees luminance rather than illuminance. Therefore with the same
illumination, by changing the surface reflectance, the luminance of the surface changes
proportionally.

Fig: Illuminance is a measure of the light falling on a surface

Fig: Luminance is a measure of the light leaving a surface.

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3.2 GOOD LIGHTING SYSTEM DESIGN:-

“Design” is the science and art of making things useful to human kind and lighting
design is the application of lighting including daylight when it is specifically used as source
of lighting to human spaces.
Like architecture, engineering and other design professions, lighting design relies on a
combination of specific scientific principles, established standards and conventions, and a
number of aesthetic, cultural and human factors applied in an artful manner.
The two objectives of the lighting designer are,
(1) To provide the right quantity of light,
(2) Provide the right quality of light.

3.2.1 Lighting Quantity:-

Lighting quantity is the amount of light provided to a room. Unlike light quality, light
quantity is easy to measure and describe.
3.2.1.1 Units:-
Lighting quantity is primarily expressed in three types of units: watts, lumens and
foot-candles (fc). Figure 3.1 shows the relationship between each unit.
The watt is the unit for measuring electrical power. It defines the rate of energy
consumption by an electrical device when it is in operation. The amount of watts consumed
represents the electrical input to the lighting system.
The output of a lamp is measured in lumens. For example, one standard four-foot
fluorescent lamp would provide 2,900 lumens in a standard office system. The amount of
lumens can also be used to describe the output of an entire fixture (comprising several
lamps). Thus, the number of lumens describes how much light is being produced by the
lighting system.
The number of foot-candles shows how much light is actually reaching the workplane
(or task). Foot-candles are the end result of watts being converted to lumens, the lumens
escaping the fixture and traveling through the air to reach the workplane. In an office, the
workplane is the desk level.
You can measure the amount of foot-candles with a light meter when it is placed on
the work surface where tasks are performed. Foot-candle measurements are important
because they express the “result” and not the “effort” of a lighting system. The Illuminating
Engineering Society (IES) recommends light levels for specific tasks using foot-candles, not
lumens or watts.

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Figure 3.1 Units of measurement.

Efficacy:-
Similar to efficiency, efficacy describes an output/ input ratio, the higher the output
(while input is kept constant), the greater the efficacy. Efficacy is the amount of lumens per
watt from a particular energy source. A common misconception in lighting terminology is
that lamps with greater wattage provide more light. However, light sources with high efficacy
can provide more light with the same amount of power (watts), when compared to light
sources with low efficacy.
3.2.1.2 IES Recommended Light Levels:-
The Illuminating Engineering Society (IES) is the largest organized group of lighting
professionals in the United States. Since 1915, IES has prescribed the appropriate light levels
for many kinds of visual tasks.

Figure 3.2 Lamp Efficacies for Various Lamp Types. (Source: Effective Lighting Solutions, Inc.)

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3.2.2 Lighting Quality:-

Lighting quality can have a dramatic influence on the attitude and performance of
occupants. In fact, different “moods” can be created by a lighting system. Consider the
behavior of people when they eat in different restaurants. If the restaurant is a fast-food
restaurant, the space is usually illuminated by bright white lights, with a significant amount of
glare from shiny tables. Occupants rarely spend much time there partly because the space
creates an uncomfortable mood and the atmosphere is “fast” (eat and leave). In contrast,
consider an elegant restaurant with a candle-lit tables and a “warm” atmosphere. Occupants
tend to relax and take more time to eat. Although occupant behavior is also linked to interior
design and other factors, lighting quality represents a significant influence. Occupants
perceive and react to a space’s light color. It is important that the lighting designer be able to
recognize and create the subtle aspects of an environment that define the theme of the space.
For example, drug and grocery stores use white lights to create a “cool” and “clean”
environment. Imagine if these spaces were illuminated by the same color lights as in an
elegant restaurant. How would the perception of the store change? Occupants can be
influenced to work more effectively if they are in an environment that promotes a “work-
like” atmosphere.
The goal of the lighting designer is to provide the appropriate quality of light for a
particular task to create the right “mood” for the space. Employee comfort and performance
are worth more than energy savings. Although the cost of energy for lighting ($.50-
$1.00/year/ft2) is substantial, it is relatively small compared to the cost of labor ($100-
$300/year/ft2). Improvements in lighting quality can yield high dividends for businesses
because gains in worker productivity are common when lighting quality is improved.
Conversely, if a lighting retrofit reduces lighting quality, occupant performance may
decrease, quickly off-setting any savings in energy costs. Good energy managers should
remember that buildings were not designed to save energy; they exist to create an
environment where people can work efficiently. Occupants should be able to see clearly
without being distracted by glare, excessive shadows or other uncomfortable features.
Lighting quality can be divided into four main considerations are Uniformity, Glare,
Color Rendering Index and Coordinated Color Temperature.
3.2.2.1 Uniformity:-
The uniformity of illuminance describes how evenly light spreads over an area.
Creating uniform illumination requires proper fixture spacing. Non-uniform illuminance
creates bright and dark spots, which can cause discomfort for some occupants. Lighting

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designers have traditionally specified uniform illumination. This option is least risky because
it minimizes the problems associated with non-uniform illumination and provides excellent
flexibility for changes in the work environment. Unfortunately, uniform lighting applied over
large areas can waste large amounts of energy. For example, in a manufacturing building,
20% of the floor space may require high levels of illumination (100 fc) for a specific visual
task. The remaining 80% of the building may only require 40 foot candles. Uniform
illumination over the entire space would require 100 fc at any point in the building. Clearly,
this is a tremendous waste of energy and money. Although uniform illumination is not
needed throughout the entire facility, uniform illumination should be applied on specific
tasks. For example, a person assembling small parts on a table should have uniform
illumination across the table top.
3.2.2.2 Glare:-
Glare is a sensation caused by relatively bright objects in an occupant’s field of view.
The key word is relative, because glare is most probable when bright objects are located in
front of dark environments. For example, a car’s high beam headlights cause glare to
oncoming drivers at night, yet create little discomfort during the day. Contrast is the
relationship between the brightness of an object and its background.
Although most visual tasks generally become easier with increased contrast, too much
brightness causes glare and makes the visual task more difficult. Glare in certain work
environments is a serious concern because it usually will cause discomfort and reduce worker
productivity.
Visual Comfort Probability (VCP):-
The Visual Comfort Probability is a rating given to a fixture which indicates the
percent of people who are comfortable with the glare. Thus, a fixture with a VCP = 80 means
that 80% of occupants are comfortable with the amount of glare from that fixture. A
minimum VCP of 70 is recommended for general interior spaces. Fixtures with VCPs
exceeding 80 are recommended in computer areas and high-profile executive office
environments.
To improve a lighting system that has excessive glare, a lighting designer should be
consulted. owever there are some basic “rules of thumb” which can assist the energy
manager. A high-glare environment is characterized by either excessive illumination and
reflection, or the existence of very bright areas typically around fixtures. To minimize glare,
the energy manager can try to obscure the bare lamp from the occupant’s field of view,
relocate fixtures or replace the fixtures with ones that have a high VCP.

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Reducing glare is commonly achieved by using indirect lighting, using deep cell
parabolic troffers, or special lenses. Although these measures will reduce glare, fixture
efficiency will be decreased because more light will be “trapped” in the fixture. Alternatively,
glare can be minimized by reducing ambient light levels and using task lighting techniques.

Visual Display Terminals (VDTs):-

Today’s office environment contains a variety of special visual tasks, including the
use of computer monitors or visual display terminals (VDTs). Occupants using VDTs are
extremely vulnerable to glare and discomfort. When reflections of ceiling lights are visible on
the VDT screen, the occupant has difficulty reading the screen. This phenomenon is also
called “discomfort glare,” and is very common in rooms that are uniformly illuminated by
fixtures with low a VCP. Therefore, lighting for VDT environments must be carefully
designed, so that occupants remain comfortable. Because the location VDTs can be
frequently changed, lighting upgrades should also be designed to be adjustable. Moveable
task lights and fixtures with high VCP are very popular for these types of applications.
Because each VDT environment is unique, each upgrade must be evaluated on a case-by-case
basis.
3.2.2.3 Color:-
Color considerations have an incredible influence on lighting quality. Light sources
are specified based on two color-related parameters: the Color Rendering Index (CRI) and the
Coordinated Color Temperature (CCT).
Color Rendering Index (CRI):-
In simple terms, the CRI provides an evaluation of how colors appear under a given
light source. The index range is from 0 to 100. The higher the number, the easier to
distinguish colors. Generally, sources with a CRI > 75 provide excellent color rendition.
Sources with a C I < 55 provide poor color rendition. To provide a “base-case,” offices
illuminated by most T12 Cool White lamps have a CRI = 62. It is extremely important that a
light source with a high CRI be used with visual tasks that require the occupant to distinguish
colors. For example, a room with a color printing press requires illumination with excellent
color rendition. In comparison, outdoor security lighting for a building may not need to have
a high CRI, but a large quantity of light is desired.
Coordinated Color Temperature (CCT):-
The Coordinated Color Temperature (CCT) describes the color of the light source.
For example, on a clear day, the sun appears yellow. On an over-cast day, the partially

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obscured sun appears to be gray. These color differences are indicated by a temperature scale.
The CCT (measured in degrees Kelvin) is a close representation of the color that an object
(black-body) would radiate at a certain temperature. For example, imagine a wire being
heated. First it turns red (CCT = 2000K). As it gets hotter, it turns white (CCT = 5000K) and
then blue (CCT = 8000K). Although a wire is different from a light source, the principle is
similar. CCT is not related to CRI, but it can influence the atmosphere of a room.
Laboratories, hospitals and grocery stores generally use “cool” (blue-white) sources, while
expensive restaurants may seek a “warm” (yellow-red) source to produce a candle-lit
appearance. Traditionally, office environments have been illuminated by Cool White lamps,
which have a CCT = 4100K. However, a more recent trend has been to specify 3500K tri-
phosphor lamps, which are considered neutral. Table illustrates some common specifications
for different visual environments.
Lamp characteristics

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3.3 LIGHTING CONTROLS:-

A lighting control system is an intelligent network based lighting control solution that
incorporates communication between various system inputs and outputs related to lighting
control with the use of one or more central computing devices. Lighting control systems are
widely used on both indoor and outdoor lighting of commercial, industrial, and residential
spaces. Lighting control systems serve to provide the right amount of light where and when it
is needed.
Lighting control systems are employed to maximize the energy savings from the
lighting system, satisfy building codes, or comply with green building and energy
conservation programs. Lighting control systems are often referred to under the term Smart
Lighting.
Lighting controls offer the ability for systems to be turned ON and OFF either
manually or automatically. There are several control technology upgrades for lighting
systems, ranging from simple (installing manual switches in proper locations) to sophisticated
(installing occupancy sensors).
The term lighting controls is typically used to indicate stand-alone control of the
lighting within a space. This may include occupancy sensors, time clocks, and photocells that
are hard-wired to control fixed groups of lights independently. Adjustment occurs manually
at each devices location.
The term lighting control system refers to an intelligent networked system of devices
related to lighting control. These devices may include relays, occupancy sensors, photocells,
light control switches or touch screens, and signals from other building systems (such as fire
alarm of HVAC). Adjustment of the system occurs both at device locations and through and
at central computer locations via software programs or other interface devices.

3.3.1 Switches:-
The standard manual, single-pole switch was the first energy conservation device. It is
also the simplest device and provides the least options. One negative aspect about manual
switches is that people often forget to turn them OFF. If switches are far from room exits or
are difficult to find, occupants are more likely to leave lights ON when exiting a room.
Occupants do not want to walk through darkness to find exits. However, if switches are
located in the right locations, with multiple points of control for a single circuit, occupants
find it easier to turn systems OFF. Once occupants get in the habit of turning lights OFF upon

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exit, more complex systems may not be necessary. The point is: switches can be great energy
conservation devices as long as they are convenient to use them.

3.3.2 Time Clocks:-

Time clocks can be used to control lights when their operation is based on a fixed
operating schedule. Time clocks are available in electronic or mechanical styles. However,
regular check-ups are needed to ensure that the time clock is controlling the system properly.
After a power loss, electronic timers without battery backups can get off schedule—cycling
ON and OFF at the wrong times. It requires a great deal of maintenance time to reset isolated
time clocks if many are installed.

3.4 LIGHTING ENERGY AUDIT:-

3.4.1 Assess opportunities for increasing lighting energy:-
a) Turn off lights in unoccupied areas.
1) Post reminder stickers to turn off lights when leaving the area.
2) Install time switches or occupancy sensors in areas of brief occupancy and remote
areas (warehouses, storage areas, etc.).
3) Rewire switches so that one switch does not control all fixtures for multiple work
areas.
4) Ensure wall-switch timers function properly.
b) Determine if existing lighting levels are higher than recommended levels.
Use a light meter to measure light levels and consult the Illuminating Engineering Society
of North America (IESNA) illumination standards.
1) Reduce lighting levels where appropriate.
2) Reduce lighting hours.
3) Employ uniform or task delamping to reduce power and lighting.
c) Review outside lighting needs.
1) Eliminate outdoor lighting where possible and where safety and security are not
compromised.
2) Replace exterior incandescent lights with more efficiency lights such as high
pressure sodium (HPS) or metal halide (MH).
3) Replace burned out lamps with lower wattage lamps.
d) Remove unneeded lamps (delamp).
e) Install more efficient lighting.

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f) Employ more effective lighting settings.

g) Follow a regular a maintenance schedule.
h) Upgrade exit signs with the help of an expert.
i) Use day lighting effectively.
j) Remove unnecessary lighting in beverage machines.
k) Train staff, especially housekeeping staff, on lighting policies/efficiency.
3.4.2 Top reasons to audit your lighting system:-
1) To save energy and money with existing equipment by using new light control strategies.
2) To improve your facility's image — go green.
3) To enhance your facility's atmosphere for occupants with added comfort, safety, and
productivity.
4) Because lighting uses 39% of electricity in office buildings (EIA Commercial Buildings
Energy Consumption Survey, 2003 data, released in 2008).
5) Because you know that older equipment needs to be replaced with more energy efficient
Products.
6) Because, sometimes, simple operational changes can impact energy savings dramatically.
7) To re-optimize system operation after facility changes.

3.5 ENERGY AUDIT INSTRUMENTS:-

The requirement for an energy audit such as identification and quantification of
energy necessitates various 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 the 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 and heat flow,
radiation, air and gas flow, liquid flow, revolutions per minute, air velocity, noise and
vibration, dust concentration, total dissolved solids, pH, moisture content, relative humidity,
flue gas analysis – CO2, O2, CO, SOX, NOX, combustion efficiency etc.

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Typical instruments used in energy audits:

The below are some of the typical instruments utilized depending on the process or
system being audited. 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.
Measurements are critical in any serious effort to conserve energy. Apart from
helping to quantify energy consumption, measurements also provide a means to monitor
equipment performance and check equipment condition. Examples of measurements and
instrument type are:
1. Flow/Velocity: Orifice plate, picot tube, Ventura tube, turbine meter, vortex shedding
flow meter, ultrasonic flow meter.
2. Temperature: Thermometers – Bimetallic, Resistance etc., Thermocouple, Radiation
pyrometer.
3. Pressure: Bourdon gauge, Diaphragm gauge, manometers
4. Stack Gas Analysis: Orsat apparatus, Oxygen analyzers, carbon dioxide analyzers,
Carbon monoxide analyzers.
5. Heat Flow: Thermograph equipment
6. Electrical: Multi-meter, Ammeter, Wattmeter, Power Factor meter, Light meter
7. Stream Trap Testing: Stethoscope, Ultrasonic Detector
Analyses, evaluation and interpretation of data lead to identification of various
measures that would save energy. These measures are then evaluated with regard to their
technical and economic feasibility resulting in recommendations for further action.

Electrical Measuring Instruments:-

These are instruments for measuring major electrical parameters such as kVA, kW,
PF, Hertz, kVAr, amps and volts. In addition some of these instruments also measure
harmonics. These instruments are applied on-line, i.e., on running motors without stopping
the motor.
Instantaneous measurements can be taken with hand-held meters, while more
advanced models facilitate cumulative readings with printouts at desired intervals.
Ammeter: it measures the current absorbed by appliances and motors.
Voltmeter: it measures the voltage or voltage drop in the grid or electrical circuits.
Watt-meter: it measures instant power demand of appliances/motors or the power
performance of generators.

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Cos-meter: it measures the power factor or monitors the rectification devices.

Multi-meter: it measures all the above quantities.
Lux meters: Illumination levels are measured with a lux meter. It consists of a photo cell
which senses the light output, converts to electrical impulses which are calibrated as lux.

All the above instruments are usually portable. They are connected to the wiring with
the use of nippers and they could feature a data-logger. Measurements of electrical power and
energy consumption should be made on all energy intensive areas and installations.
Since these instruments are generally not expensive, it is advised to examine their
permanent installation in some of the above cases.
During the measurement of all the above quantities, a strict distinction must be made
between the total power (metered in kVA) and the active power (usually metered in kW), as
well as of Cos.
Care is also needed with electrical loads that are not expected to present a sinusoidal
waveform, as is the case with variable speed motors and UPS. Usual measuring
instrumentation is based on a sinusoidal waveform, which gives wrong readings. In such
cases, the use of meters measuring real RMS (Root Mean Square) values is necessary.
The function of such meters is based on digital sampling, so they could be substituted
with PC-based meters.

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3.5.1 WATTMETER:-
The wattmeter is an instrument for measuring the electric power (or the supply rate
of electrical energy) in watts of any given circuit. Electromagnetic wattmeters are used for
measurement of utility frequency and audio frequency power; other types are required for
radio frequency measurements.

A wattmeter is an instrument which is used to measure electric power given to or

developed by an electrical circuit. Generally, a wattmeter consists of a current coil and a
potential coil.
Types of Wattmeter:
i) Electrodynamometer wattmeter – for both DC and AC power measurement
ii) Induction wattmeter – for AC power measurement only

i) Working Principle of Electrodynamometer Wattmeter

The electrodynamometer wattmeter works on the dynamometer principle i.e. a

mechanical force acts between two current carrying conductors or coils.
It consists of a fixed, that is divided into two halves which are parallel to each other
and is connected in series with the load while the moving is connected across the load
through a series multiplier resistance. The fixed coil is called current coil while the moving
coil is called potential coil. When the wattmeter is connected in a circuit to measure power.
The current coil carries the load current and potential coil carries a current proportional to the

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load voltage. Due to the currents in the coils, a mechanical force acts between them. The
result of this mechanical force deflects the moving coil and the pointer over the scale. The
pointer comes to the rest when the deflecting torque and controlling torque become equal. As
the reversal of the circuit current reverses the currents in both the current coil and potential
coil so that the direction of deflecting torque remains unchanged. Therefore,
electrodynamometer wattmeter can measure power in both the AC as well DC circuits.

ii) Working Principle of Induction Wattmeter

The induction type wattmeter can be used to measure AC power only.
The working of induction type wattmeter is based on the principle of electromagnetic
induction.
The induction wattmeter consists of two laminated electromagnets viz. Shunt Magnet
and Series Magnet. The shunt magnet is connected across the supply and carries a current
proportional to the supply voltage. The coil of shunt magnet is made highly inductive so that
the current in it lags the supply voltage by 90°. The series magnet is connected in series with
the supply and carries the load current. The coil of series magnet is made highly non-
inductive. A thin disc (made up of aluminium) mounted on a spindle is placed between the
two magnets so that it cuts the flux of the two magnets.

When the wattmeter is connected in an AC circuit, a current flows through the coil of
the shunt magnet that is proportional to the supply voltage and the series magnet carries the
load current. The fluxes produced by the two magnets induce eddy currents in the aluminium
disc by the action of electromagnetic induction. Due to the interaction between the fluxes and
eddy currents, a deflecting torque is produced on the disc, causing the disc to move and
hence, the pointer connected to the disc moves over the scale. The pointer comes to rest when
the deflecting torque becomes equal to the controlling torque.

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3.5.2 DATA LOGGER:-

A data logger is an instrument that monitors and records changes in conditions over
time. They can be single, stand-alone units or consist of multiple channels. Most stand-alone
units are battery-powered, allowing them to record while in transit and for extended periods
of time.
How does a data logger work?
Data loggers use a microprocessor, an internal memory for data storage, and a sensor
to collect data. They are generally small and battery powered devices. Data loggers can either
interface with a computer and use software to view and analyze the collected data or be used
as a stand-alone device with a local interface or connect wirelessly to a device.
The advantage of data loggers is that they can operate independently of a computer,
unlike many other types of data acquisition devices. Data loggers are available in various
shapes and sizes. The range includes simple economical single channel fixed function loggers
to more powerful programmable devices capable of handling hundreds of inputs.
Data logger input types:-
Data loggers can accept different input types. There are also multi-input data loggers
that can accept two or more types of input, such as temperature and humidity or temperature
and pressure. Some data loggers can even accept all types of input.
The most common input types include:
i) Pressure: Measures the pressure of gases and liquids, including atmospheric and water
pressure.
ii) Temperature: These loggers can be used to measure extremely high and low
temperatures as well as liquid temperatures.
iii) Humidity: Humidity loggers can collect data on relative humidity, dew point, and water
vapor concentration in standard or metric units.
iv) Voltage: Voltage data loggers can adapt to any voltage measurement, including pressure
to torque and load to force.
v) Current: Current data loggers include a range of AC and DC data loggers and are often
used to monitor building equipment.
Data logger applications:-
Data loggers can monitor temperature, humidity, carbon dioxide, pH, pressure,
voltage, current, and pulse – making them useful for a number of applications, including to:
 Verify temperature and humidity levels of storage and transportation facilities.

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 Provide building maintenance information on heating, ventilation, and air

conditioning operations to assist with energy conversavtion.
 Monitor growing conditions in the agricultural industry.
 Monitor vaccine storage in a medical facility.
 Monitor the temperature of food.

Data loggers are used in a broad range of environments, including indoors, outdoors,
in water, and in transit – essentially anywhere data is needed, and the convenience of battery
power is preferred.

3.5.3 THERMOMETERS (or) THERMOCOUPLES:-

A thermocouple is a device for measuring temperature. It comprises two dissimilar
metallic wires joined together to form a junction. When the junction is heated or cooled, a

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small voltage is generated in the electrical circuit of the thermocouple which can be
measured, and this corresponds to temperature.
In theory, any two metals can be used to make a thermocouple but in practice, there
are a fixed number of types that are commonly used. They have been developed to give
improved linearity and accuracy and comprise specially developed alloys.
Thermocouples can be made to suit almost any application. They can be made to be
robust, fast responding and to measure a very wide temperature range.
Contact thermometer: These are thermocouples which measures for example flue gas, hot
air, hot water temperatures by insertion of probe into the stream. For surface temperature, a
leaf type probe is used with the same instrument.

Infrared Thermometer:
An infrared thermometer is a thermometer which infers temperature from a portion of
the thermal radiation sometimes called blackbody radiation emitted by the object being
measured. They are sometimes called laser thermometers if a laser is used to help aim the
thermometer, or non-contact thermometers to describe the device's ability to measure
temperature from a distance. By knowing the amount of infrared energy emitted by the object
and its emissivity, the object's temperature can often be determined. Infrared thermometers
can be used to serve a wide variety of temperature monitoring functions. A few examples
provided to this article include:
 Detecting clouds for remote telescope operation
 Checking mechanical equipment or electrical circuit breaker boxes or outlets for hot
spots
 Checking heater or oven temperature, for calibration and control purposes

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 Detecting hot spots / performing diagnostics in electrical circuit board manufacturing

 Checking for hot spots in fire fighting situations
 Monitoring materials in process of heating and cooling, for research and development
or manufacturing quality control situations

There are many varieties of infrared temperature sensing devices available today,
including configurations designed for flexible and portable handheld use, as well many
designed for mounting in a fixed position to serve a dedicated purpose for long periods.
This is a non-contact type measurement which when directed at a heat source directly
gives the temperature read out. This instrument is useful for measuring hot spots in furnaces,
surface temperatures etc.
They are widely used and are not expensive. They cover a wide range of
temperatures, from a few degrees up to 10000C and are usually portable. They need frequent
calibration with specialized instruments. Their main disadvantage is that they have a weak
signal, easily affected by industrial noise.

3.5.4 PYROMETER:-
Pyrometer also is known as an Infrared thermometer or Radiation thermometer or
non-contact thermometer used to detect the temperature of an object’s surface temperature,
which depends on the radiation (infrared or visible) emitted from the object. Pyrometers act
as photo detector because of the property of absorbing energy and measuring of EM wave
intensity at any wavelength.
These are used to measure high-temperature furnaces. These devices can measure the
temperature very accurately, precisely, pure visually and quickly. Pyrometers are available in
different spectral ranges (since metals – short wave ranges and non-metals-long wave
ranges).
Color pyrometers are used to measure the radiation emitted from the object during the
temperature measurement. These can measure the object’s temperature very accurately.
Hence the measuring errors are very low with these devices.

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Color pyrometers are used to determine the ratio of two radiation intensities with two
spectral ranges. These are available in series of Metis M3 and H3 and handheld portables
Capella C3 in different versions.
High-speed pyrometers are used to temperature more fastly and quickly than M3
devices. These are available in combination with 1-color and 2-color pyrometers. These
devices can create clear temperature profiles of fast-moving objects and control the adequate
temperature level.
Types of Pyrometer:
To detect the different object’s temperature, pyrometers are classified into types. They are,
i) Optical Pyrometers
ii) Infrared / Radiation pyrometers
i) Optical Pyrometers
These are one of the types of pyrometers used to detect thermal radiation of the
visible spectrum. The temperature of the hot objects measured will depend on the visible light
they emit. Optical pyrometers are capable of providing a visual comparison between a
calibrated light source and the targeted object’s surface. When the temperature of the filament
and the object’s surface is the same, then the thermal radiation intensity caused due to the
filament merges and into the targeted object’s surface and becomes invisible. When this
process happens, the current passing through the filament is converted into a temperature
level.
ii) Infrared or Radiation Pyrometers
These pyrometers are designed to detect thermal radiation in the infrared region,
which is usually at a distance of 2-14um. It measures the temperature of a targeted object
from the emitted radiation. This radiation can be directed to a thermocouple to convert into
electrical signals. Because the thermocouple is capable of generating higher current equal to
the heat emitted. Infrared pyrometers are made up of pyroelectric materials like
polyvinylidene fluoride (PVDF), triglycine sulfate (TGS), and lithium tantalate (LiTaO3).
Advantages/Disadvantages:
Usually, Pyrometers are compared with thermometers and also have some advantages
and disadvantages while using.
The advantages of pyrometer are
 It can measure the temperature of the object without any contact with the object. This
is called Non-contact measurement.
 It has a fast response time

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 Good stability while measuring the temperature of the object.

 It can measure different types of object’s temperature at variable distances.
The disadvantages of pyrometer are
 Pyrometers are generally rugged and expensive
 Accuracy of the device can be affected due to the different conditions like dust,
smoke, and thermal radiation.
Applications:
Pyrometers are used in different applications such as,
 To measure the temperature of moving objects or constant objects from a greater
distance.
 In metallurgy industries
 In smelting industries
 Hot air balloons to measure the heat at the top of the balloon
 Steam boilers to measure steam temperature
 To measure the temperature of liquid metals and highly heated materials.
 To measure furnace temperature.

A pyrometer is a non-contacting device that intercepts and measures thermal

radiation, a process known as pyrometer. This device can be used to determine
the temperature of an object's surface.
A pyrometer has an optical system and a detector. The optical system focuses
the thermal radiation onto the detector. The output signal of the detector (temperature T) is
related to the thermal radiation or irradiance j* of the target object through the Stefan–
Boltzmann law, the constant of proportionality σ, called the Stefan-Boltzmann constant and
the emissivity ε of the object.

This output is used to infer the object's temperature. Thus, there is no need for direct contact
between the pyrometer and the object, as there is with thermocouples and resistance
temperature detectors (RTDs).
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3.5.5 LUX METER:-

A lux meter is a device for measuring brightness. It specifically measures the intensity
with which the brightness appears to the human eye. This is different than measurements of
the actual light energy produced by or reflected from an object or light source.
The lux is a unit of measurement of brightness, or more accurately, illuminance. It
ultimately derives from the candela, the standard unit of measurement for the power of light.
A candela is a fixed amount, roughly equivalent to the brightness of one candle.
While the candela is a unit of energy, it has an equivalent unit known as the lumen,
which measures the same light in terms of its perception by the human eye. One lumen is
equivalent to the light produced in one direction from a light source rated at one candela. The
lux takes into account the surface area over which this light is spread, which affects how
bright it appears. One lux equals one lumen of light spread across a surface one square meter.
A lux meter works by using a photo cell to capture light. The meter then converts this
light to an electrical current. Measuring this current allows the device to calculate the lux
value of the light it captured.

Specifications:-
Cosine function – the light which enters the photodetector could be refracted and it can
cause measurement error and this can be corrected by some photodetectors.
Operating temperature – it is the maximum ambient temperature that the photodetector
could operate effectively. Photodetectors can be damaged above 1200 F
Range – it is the dynamic detection range of the light meter, which will be expressed in lux
or foot-candles.
Features:-
Auto-off – Electronic lux meters have an automated power down feature if the device is left
idle
Backlit – the LCD display has a backlighting feature to measure low light

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Battery indicator - the low battery can cause fluctuations in meter reading so battery
indicator is useful
Filters – this option allows the user to remove certain wavelengths, such as backlight which
would affect the measuring
Memory and USB – memory option will be useful to store measurements and the USB ports
can be used to connect to a computer and also can be used for charging
Outdoor – the meter is suitable for outdoor applications, which will have the greatest
difference in light intensity
Lux meters are used in the defense establishment; it is also used in electricity board,
lux meters can be used to measure, street and security lighting, office and factory lighting,
daylight and sunlight. An important use of lux meter is in the workplace it can be used to
check whether a room is bright enough to protect workers from suffering damage to their
eyesight. It is also used to adjust the lighting systems of artificial lighting on railways. It is
also useful for photography and video filming.

3.5.6 TONG TESTER (or) CLAMP METER:

Clamp meter is often known as Tong Tester also. It is easy to use test equipment and
is useful in the measurement of a live-conductor without damaging / powering down the
circuit. One of the biggest advantages of this equipment is that one may take the
measurement of a high value current even without powering off/shutting down the circuitry
under test.
The only disadvantage of this test equipment (Clamp meter or Tong tester) is that the
accuracy of the tong-tester is considerably low.
Parts of Clamp Meter (Tong Tester):
Generally, a Clamp Meter or Tong Tester has the following parts: –
1. Transformer Clamps (Jaws)
It senses the magnetic field of the current flowing through the conductor.
2. Clamp Opening Trigger
It is used to open/ close the clamps.
3. Power Switch
As the name suggests, it is used to power on/ off the meter.
4. Back Light Button
It is used to light up the LCD display for easy reading of displayed value in dark places or at
night.

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5. Hold Button
It is used to hold the last value on the display.
6. Negative/ Ground Input Terminal
It is used to connect the negative/ ground jack of the meter cable.
7. Positive Input Terminal
It is used to connect the positive jack of the meter cable.
8. LCD Display
It displays the measured value.
9. Functional Rotary Switch
It is used to select the type and range of current being measured.

Types of Clamp Meter (Tong Tester):

There are two basic types of tong testers available in the market depending on the
nature of current to be measured. They are: –
 Current Transformer Clamp Meter (Tong Tester) – Used to measure AC current.
 Hall Effect Clamp Meter (Tong Tester) – Used to measure AC as well as DC
current.
A current transformer based Tong Tester (Clamp meter) consists of two clamps made
of Ferrite Iron. These clamps are independently wrapped up with Copper coils. Together both
of them form a magnetic core which actually does the measurements. The Electro-magnetic
principle says that “whenever a current flows through a conducting material, it causes the
generation of magnetic-flux”.
Similar to current transformer Clamp Meters, Hall Effect clamp meters also consists
of two clamps made of Ferrite Iron. However, these clamps are not wrapped up with copper
wires like in case of Current transformer clamp meters. In Hall Effect clamp meter, the
magnetic field induced by the current flowing through the conductor is concentrated in the
gap(s) (one or more) of the core whenever the clamps close around the conductor.

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3.6 APPLICATIONS OF PLC’S:-

Power line communication (PLC):-
Power line communication (PLC) carries data on a conductor that is also used
simultaneously for AC electric power transmission or electric power distribution to
consumers. It is also known as power line carrier, power line digital subscriber
line (PDSL), mains communication, power line telecom (PLT), power line
networking (PLN), and broadband over power lines (BPL).
A wide range of power line communication technologies are needed for different
applications, ranging from home automation to Internet access. Most PLC technologies limit
themselves to one type of wires (such as premises wiring within a single building), but some
can cross between two levels (for example, both the distribution network and premises
wiring). Typically transformers prevent propagating the signal, which requires multiple
technologies to form very large networks. Various data rates and frequencies are used in
different situations.
A number of difficult technical problems are common between wireless and power
line communication, notably those of spread spectrum radio signals operating in a crowded
environment. Radio interference, for example, has long been a concern of amateur
radio groups.
Power line communications systems operate by adding a modulated carrier signal to
the wiring system. Different types of power line communications use different frequency
bands. Since the power distribution system was originally intended for transmission of AC
power at typical frequencies of 50 or 60 Hz, power wire circuits have only a limited ability to
carry higher frequencies. The propagation problem is a limiting factor for each type of power
line communications.
The main issue determining the frequencies of power line communication is laws to
limit interference with radio services. Many nations regulate unshielded wired emissions as if
they were radio transmitters. These jurisdictions usually require unlicensed uses to be below
500 KHz or in unlicensed radio bands. Some jurisdictions (such as the EU), regulate wire-line
transmissions further. The U.S. is a notable exception, permitting limited-power wide-band
signals to be injected into unshielded wiring, as long as the wiring is not designed to
propagate radio waves in free space.
Data rates and distance limits vary widely over many power line communication
standards. Low-frequency (about 100–200 kHz) carriers impressed on high-voltage
transmission lines may carry one or two analog voice circuits, or telemetry and control

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circuits with an equivalent data rate of a few hundred bits per second; however, these circuits
may be many miles long. Higher data rates generally imply shorter ranges; a local area
network operating at millions of bits per second may only cover one floor of an office
building, but eliminates the need for installation of dedicated network cabling.
Programmable logic controller:-
A programmable logic controller, commonly known as PLC, is a solid state, digital,
industrial computer using integrated circuits instead of electromechanical devices to
implement control functions. It was invented in order to replace the sequential circuits which
were mainly used for machine control. They are capable of storing instructions, such as
sequencing, timing, counting, arithmetic, data manipulation and communication, to control
machines and processes.
According to NEMA (National Electrical Manufacture’s Association, USA), the
definition of PLC has been given as,
“Digital electronic devices that uses a programmable memory to store instructions and to
Implement specific functions such as logic, sequencing, timing, counting, and arithmetic to
control machines and processes.”
PLCs are used in many industries and machines. Unlike general-purpose computers,
the PLC is designed for multiple inputs and output arrangements, extended temperature
ranges, immunity to electrical noise, and resistance to vibration and impact. Programs to
control machine operation are typically stored in battery-backed-up or non-volatile memory.
A PLC is an example of a hard real time system since output results must be produced in
response to input conditions within a limited time, otherwise unintended operation will result.
Some of PLC applications are,
 Equipment Status
 Process Control
 Chemical Processing
 Equipment Interlocks
 Machine Protection
 Smoke Detection
 Gas Monitoring
 Envelope Monitoring
 Personnel Safety
 High-precision Synchronized Control in Crimping Equipment using PLC
 Bottle Filling Control using PLC

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 High-speed Sorting on Conveyors using PLC

 Image-processing Inspection of Electronic Components using PLC
 Shopping Mall Fountain Control using PLC
 Air Cleaner Control using PLC
 Sheet Feeding Control in Packing Machine using PLC
 Testing Equipment
 Warming Moulding Machines
 Annunciator
 Lighting Pattern Control
 Escalator with Automatic Operation Function
 Drilling PCBs with High-speed, High-precision Positioning
 Hydraulic Pressure Control in Forming Machine
 Temperature Cascade Control in Industrial Furnace
 Production Control System

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UNIT IV
INTRODUCTION TO DEMAND SIDE MANAGEMENT

4.1 INTRODUCTION TO DSM:-

Energy demand management, also known as demand side management (DSM), is
the modification of consumer demand for energy through various methods such as financial
incentives and education. Usually, the goal of demand side management is to encourage the
consumer to use less energy during peak hours, or to move the time of energy use to off-peak
times such as nighttime and weekends. Peak demand management does not necessarily
decrease total energy consumption, but could be expected to reduce the need for investments
in networks and/or power plants.
Demand Side management is a mechanism to influence customer’s CAPABILITY
and WILLINGNESS to reduce electricity consumption.
Demand Side Management is a utility program aiming to fine-tune consumers’ energy
consumption pattern, according to the utility’s energy production and distribution capacity.
When DSM is applied to the consumption of energy in general—not just electricity
but fuels of all types—it can also bring significant cost benefits to energy users (and
corresponding reductions in emissions). Opportunities for reducing energy demand are
numerous in all sectors and many are low-cost, or even no cost, items that most enterprises or
individuals could adopt in the short term, if good energy management is practiced.
Demand-side management is used to describe the actions of a utility, beyond the
customer's meter, with the objective of altering the end-use of electricity - whether it be to
increase demand, decrease it, shift it between high and low peak periods, or manage it when
there are intermittent load demands - in the overall interests of reducing utility costs. In other
words DSM is the implementation of those measures that help the customers to use electricity
more efficiency and it doing so reduce the customers to use the utility costs. DSM can be
achieved through.
 Improving the efficiency of various end-users through better housekeeping correcting
energy leakages, system conversion losses, etc ;
 Developing and promoting energy efficient technologies, and
 Demand management through adopting soft options like higher prices during peak
hours, concessional rates during off-peak hours seasonal tariffs, interruptible tariffs,
etc.

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4.2 CONCEPT OF DSM:-

The concept of demand-side management (DSM) has been introduced in the USA,
more specifically in the electricity industry, in the mid-eighties. It has been originally defined
as the planning, implementation and monitoring of a set of programmers and actions carried
out by electric utilities to influence energy demand in order to modify electric load curves in
a way which is advantageous to the utilities.
Changes in load curves must decrease electric systems running costs - both production
and delivery costs -, and also allow for deferring or even avoiding some investments in
supply-side capacity expansion. Thus, DSM has been driven by strict economic reasons.
Energy efficiency was a privileged instrument for DSM implementation, as will be seen.
Hence, in societal terms, this was a typical win-win situation, as consumers would also
benefit from cheaper energy services, as overall efficiency would increase.
DSM has been a major breakthrough that led to a great deal of innovation, both at
business management and at technological development, and also to huge environmental
benefits. Yet, a great number of DSM tools already existed previously to the concept, and had
been in use by many utilities, namely those tools related to remote load control, known as
load management (LM).
But LM aims predominantly at influencing power use - the amount of energy used by
unit of time, at specific times. Energy efficiency was actually a newcomer to the business,
brought by DSM to the portfolio of utility management options.
There are six main objectives defined in the context of DSM, known as: peak
clipping, valley filling, load shifting, flexible load curve, strategic conservation and strategic
load growth. Apart from strategic load growth (SLG), all other options require that the
utility's system is under pressure and requires either capacity expansion or load relief. Cost-
benefit analysis will dictate which options to adopt.
In many cases utilities have opted for DSM in order to avoid or postpone important
financial stresses. In general, DSM implementation options may be classified into several
different broad categories: customer education, direct customer contact, trade ally co-
operation, advertising and promotion, alternative pricing, direct incentives. Some measures
pin-pointed in the text below are examples of some of them.

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4.3 BENEFITS OF DSM:-

An energy customer may have many reasons for selecting a certain DSM activity.
Generally these would be economic, environmental, marketing or regulatory. The above
points are expressed in a slightly different way, where it is argued that the benefits of DSM to
consumers, enterprises, utilities and society can be realized through:
 Reductions in customer energy bills;
 Reductions in the need for new power plant, transmission and distribution networks;
 Stimulation of economic development;
 Creation of long-term jobs due to new innovations and technologies;
 Increases in the competitiveness of local enterprises;
 Reduction in air pollution;
 Reduced dependency on foreign energy sources;
 Reductions in peak power prices for electricity.
Various reasons are put forward for promoting or undertaking DSM. For example,
DSM may be aimed at addressing the following issues:
 Cost reduction—many DSM and energy efficiency efforts have been introduced in
the context of integrated resource planning and aimed at reducing total costs of
meeting energy demand;
 Environmental and social improvement—energy efficiency and DSM may be
pursued to achieve environmental and/or social goals by reducing energy use, leading
to reduced greenhouse gas emissions;
 Reliability and network issues—ameliorating and/or averting problems in the
electricity network through reducing demand in ways which maintain system
reliability in the immediate term and over the longer term defer the need for network
augmentation;
 Improved markets—short-term responses to electricity market conditions (“demand
response”), particularly by reducing load during periods of high market prices caused
by reduced generation or network capacity.
Benefits of the DSM are,
 Reducing generation margin by DSM.
 Improving transmission grid investment and operation efficiency through DSM.
 Improving distribution network investment efficiency through DSM.
 DSM in managing demand–supply balance in a system with intermittent renewable.
 Role of DSM in distributed power systems.

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4.4 DIFFERENT TECHNIQUES OF DSM:-

4.4.1 Time of day pricing:-
Cost of supply is not constant for any type of energy delivery, be it electricity, gas or
heated water. Variations of demand per unit time within a given period of time cause variable
operating conditions that correspond to variable system running cost.
The causes for variations are different among energy forms but variations always
exist. Tariff systems with multi rate structure are, in general, an adequate response to variable
costs of supply, as they correspond to pass on to consumers an approximate image of supply
cost variations -- they are usually based on long term previsions of marginal cost of delivery.
In the electricity business multi rate tariffs are already traditional, at least to certain
customer classes. The same does not apply with the same extension to other utilities, mainly
because of technical and management difficulties. The alternative is the so-called flat rate,
meaning a constant price, independent of cost of supply variations.

4.4.2 Multi-utility power exchange model and time of day models for planning:-
The purpose of time-of-day travel demand models is to produce traffic assignment
results that more accurately reflect the capacity restraining impact of the highway network on
traffic volumes and speeds. In highly congested areas, particularly large urban areas, the
finite amount of physical highway capacity results in the spreading of the peak periods.
While it is not possible for a roadway to carry an hourly volume of traffic that is
greater than its theoretical maximum capacity, the highway assignment algorithms commonly
used can produce traffic volumes on roadways that exceed the capacity.
In these cases, the volume of traffic assigned during the peak periods must be
constrained and change as the capacity of the highway system is reached. This can be done
by using a simulation-based or dynamic assignment procedure or by increasing the time
period over which the volume can be assigned. Several methods have been developed that
account for this spreading out of the peak volumes.
There are several commonly employed methods for accounting for time-of-day of
travel in the four-step process.
To proceed from the initial daily trip generation estimates to the volume estimates by
time period, average daily travel estimates must be converted to trips by time period. This can
happen at four places in the modeling process:
 After trip assignment;
 Between mode choice and trip assignment;

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 Between trip distribution and mode choice; and

 Between trip generation and trip distribution.

4.5 LOAD MANAGEMENT:-

Load management, also known as demand side management (DSM), is the process
of balancing the supply of electricity on the network with the electrical load by adjusting or
controlling the load rather than the power station output. This can be achieved by direct
intervention of the utility in real time, by the use of frequency sensitive relays triggering
circuit breakers (ripple control), by time clocks, or by using special tariffs to
influence consumer behavior. Load management allows utilities to reduce demand for
electricity during peak usage times, which can, in turn, reduce costs by eliminating the need
for peaking power plants. In addition, peaking power plants also often require hours to bring
on-line, presenting challenges should a plant go off-line unexpectedly. Load management can
also help reduce harmful emissions, since peaking plants or backup generators are often dirtier
and less efficient than base load power plants. New load-management technologies are
constantly under development — both by private industry and public entities.

4.6 LOAD PRIORITY TECHNIQUE:-

Electricity suppliers can influence the redistribution of the demand and time of
electricity usage by load management by their customers. Similar activities can be
encouraged by gas utilities.
Load management of any kind will generally be conducted so that the energy user will
be able to continue production while the utility achieves a modified load curve. The types of
load management techniques are
 Load leveling;
 Load control;
 Tariff incentives and penalties.

4.6.1 Load leveling:-

Load leveling helps to optimize the current generating base-load without the need for reserve
capacity to meet the periods of high demand. Classic forms of load leveling are presented in
below as,
 Peak clipping
 Valley filling
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 Load shifting
4.6.2 Load control:-
Load control is where loads (e.g. heating, cooling, ventilation and lighting) can be
switched on or off, often remotely, by the utility. In this case, the customers may have back-
up generators or energy storage capability and generally have an interruptible agreement with
the utility in return for a special rate.
Utilities may even call on on-site generators to meet peak demand on the grid. The
energy distribution industry may use rolling blackouts to reduce demand when the demand
surpasses the capacity. Rolling blackouts are the systematic switching off of supply to areas
within a supplied region such that each area takes turns to “lose” supply.
Utilities or municipalities in these cases would try to publish or announce a schedule
so that businesses and homes can plan their use of energy for that period. Recently, in
Western Cape of South Africa, consumers were subject to a fairly long period of rolling
blackouts.
This was due to demand surpassing capacity at one unit of Koeberg Power Station
under unplanned maintenance. These cuts were not always well communicated to the
customers or did not run according to the published schedule causing much confusion, lost
production and even lost goods such as refrigerated products.
However, the winter demand was largely met due to customer participation in energy
efficiency and DSM initiatives.

4.6.3 Tariff incentives and penalties:-

Utilities encourage a certain pattern of use by tariff incentives where customers use energy at
certain times to achieve a better-priced rate for their energy use.
These include:
 Time-of-use rates—where utilities have different charges for power use during
different periods. Higher peak time charges would encourage a user to run high load
activities in an off-peak period when rates are lower.
 Power factor charges, where users are penalized for having power factors below a
fixed threshold, usually 0.90 or 0.95 (see box 7).
 Real-time pricing, where the rate varies based on the utilities load (continuously or by
the hour).

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4.7 PEAK CLIPPING:-

 The reduction of the system peak loads embodies one of the classic forms of load
management.
 Peak clipping is generally considered as the reduction of peak load by using direct
load control.
 Direct load control is most commonly practiced by direct utility control of either
service to customer facilities or of customers' appliances.
 While many utilities consider this as means to reduce peaking capacity or capacity
purchases and consider control only during the most probable days of system peak,
direct load control can be used to reduce operating cost and dependence on critical
fuels by economic dispatch.
 Reduce peak demand at specific periods
 Reduces the need for installing additional power plants and reduce the operation costs
of power stations.
 Direct control on equipment or through tariff.
 One of the most traditional means for load management

4.8 VALLEY FILLING:-

 Is the second classic form of load management and applies to both gas and electric
systems.
 Valley filling encompasses building off-peak loads. This may be particularly desirable
where the long-run incremental cost is less than the average price of energy. Adding
properly priced off-peak load under those circumstances decreases the average price.
 Valley filling can be accomplished in several ways, one of the most popular of which
is new thermal energy storage (water heating and/or space heating) that displaces
loads served by fossil fuels.
 Increasing the load during off-peak hours.
 The long-term marginal production costs are less than the selling price of electricity.

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 Increase energy consumption during off-peak hours; thermal storage facilities, special
rates during off-peak hours.
 traditional means for load management

4.9 LOAD SHIFTING:-

 Is the last classic form of load management and also applies to both gas and electric
systems.
 This involves shifting load from on-peak to off-peak periods. Popular
applications include use of storage water heating, storage space heating, coolness
storage, and customer load shifts.
 The load shift from storage devices involves displacing what would have been
conventional appliances.
 Shifting peak period loads to off-peak hours.
 Measures are related to heating and air-conditioning.
 Shifting load demands associated with thermal storage
 Involves load shifting related to conventional electricity applications (building heating
by electric convectors).
 traditional means for load management

4.10 STRATEGIC CONSERVATION:-

 Is the load shape change that results from programs directed at end use consumption?
 Not normally considered load management, the change reflects a modification of the
load shape involving a reduction in consumption as well as a change in the pattern of
use.

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 In employing energy conservation, the planner must consider what conservation

actions would occur naturally and then evaluate the cost-effectiveness of possible
intended programs to accelerate or stimulate those actions.
 Examples include weatherization and appliance efficiency improvement.
 A load management activity, involves a decrease in sales as well as modifications in
the way electricity is used. SEBs is unlikely to want a decrease in their sales.
 Non-traditional approaches.

4.11 STRATEGIC GROWTH:-

 Is the load shape change that refers to a general increase in sales beyond the valley
filling described previously?
 Load growth may involve increased market share of loads that are or can be, served
by competing fuels, as well as economic development.
 Load growth may include electrification.
 Electrification is the term being employed to describe the new emerging electric
technologies surrounding electric vehicles, industrial process heating, and automation.
 These have a potential for increasing the electric energy intensity of the industrial
sector.
 This rise in intensity may be motivated by reduction in the use of fossil fuels and raw
materials resulting in improved overall productivity.
 Overall increase in sales through the development of new application (electric cars,
microwave, automation).
 Non-traditional approaches.

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4.12 FLEXIBLE LOAD SHAPE:-

 Is a concept related to electric system reliability, a planning constraint?
 Load shape can be flexible if customers are presented with options as to the
variations in quality of service that they are willing to allow in exchange for various
incentives.
 The program involved can be variations of interruptible or curtail able load; concepts
of pooled integrated energy management systems; or individual customer load control
devices offering service constraints.
 Can curtail a consumers load demand if needed.
 The customer must then produce his own electricity or use other energy sources to
meet his demands.
 Non-traditional approach.

4.13 ENERGY EFFICIENT EQUIPMENT:-

Some energy retrofits involve replacing aging equipment. Investing in newer,
more energy-efficient equipment will help to increase the energy efficiency of your building.
ENERGY STAR compliant auxiliary and plug-load equipment can take your energy
management goals to the next level, and at a lower risk than most other equipment
investments.
The benefits of using energy-saving equipment are:
 direct cost savings (i.e. lower monthly energy bills),
 Higher building value that is attractive to buyers and lenders - every dollar invested
can produce between two and three dollars in asset value growth.

4.13.1 Why ENERGY STAR certified equipment?

 ENERGY STAR performance levels provide a readily available benchmark of
equipment performance, and ENERGY STAR products can save anywhere from 10 to

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30 percent on your equipment's energy consumption - generating a significant return

on investment.
 ENERGY STAR products make the procurement process easier, because the work to
establish a value proposition has already been done.
 Energy-efficiency equipment upgrades can yield greater rates of return than many
traditional investment options.

For guidance on choosing energy-efficient equipment, visit our page on Procurement

or bulk buying. Gaining these benefits means managing building energy consumption using
best practices and the latest advancements in equipment and technologies. The United States
Environmental Protection Agency's ENERGY STAR Buildings Five-Stage Approach for
energy-efficiency upgrades was developed to produce savings of up to 30 percent for an
entire building:
Stage one - Green lights
Install energy-efficient lighting systems and controls for substantial energy savings at low
costs.
Stage Two - Building Tune-Up (RCx)
Perform a comprehensive tune-up of the entire facility to get it into peak condition.
Stage three - Other Load Reductions
Look for other opportunities to increase your building's energy efficiency, such as purchasing
ENERGY STAR office equipment.
Stage Four - Fan System Upgrades
Right size fan systems, add variable-speed drives, convert to a variable-air-volume system,
add heat recovery on exhaust air, etc.
Stage Five - Heating and Cooling System Upgrades
Replace aging equipment such as condensing boilers and variable-speed pumps with more
energy-efficient models in order to meet the building's reduced heating and cooling loads,
and upgrade other central plant systems.

4.14 MANAGEMENT AND ORGANIZATION OF ENERGY

CONSERVATION AWARENESS PROGRAMS:-
In developing countries there is generally a low awareness of energy efficiency and
DSM programmes, and therefore marketing is necessary to promote these. In the service area
of a utility company, the sectors and end-users that can benefit from DSM need to be

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identified, customized programmes developed (and their cost effectiveness evaluated) and
then a plan to market and implement the programmes needs to be prepared.
Many industrial and commercial companies still have not carried out energy audits to
collect reliable information on their current operations. While this may be due to a failure by
management to appreciate the potential benefits of energy efficiency, some companies will
lack skilled personnel able to perform audits.
Consideration should be given to using outside experts, as the cost will normally be
well justified. Organizations conducting energy audits or advising on DSM measures need to:
 Have a knowledge and understanding of DSM systems and opportunities;
 Demonstrate the competence and comprehensiveness of their assessment;
 Consider the accuracy of their assumptions;
 Be aware of the production and safety constraints of involved plants/ companies.
Often as a result of completing an audit, a variety of DSM measures may be identified.
Load management programmes to increase energy efficiency need to consider the following
factors:
 The cost to the customer;
 Variations in the prices of electricity and other fuels;
 The value of avoided losses resulting from improved electricity system reliability;
 Any potential losses in production when implementing DSM programmes.
It is essential that a proper financial analysis of the benefits of energy efficiency improvement
be carried out when considering setting up DSM activities. For example, too much emphasis
may be placed on the initial cost of equipment used by DSM programmes rather than on life
cycle costs. Also there is often a perception that electrical energy is a small component of
overall cost and therefore there is little motivation to pay for DSM measures to modify load
profiles. Where fuels are involved, proper sensitivity analyses may not be performed to take
account of potential energy cost variations or inaccuracies in capital investment estimates.

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UNIT – V
ECONOMIC AND COST EFFECTIVENESS TESTS OF DSM
PROGRAMS

5.1 BASIC PAYBACK CALCULATIONS:-

Simple Payback - a measure of how long it will be before the investment makes
money, and how long the financing term needs to be.
Simple Payback Period (SPP) represents, as a first approximation; the time (number
of years) required to recover the initial investment (First Cost), considering only the Net
Annual Saving:
The simple payback period is usually calculated as follows:

Simple payback period for a continuous Deodorizer that costs Rs.60 lakhs to purchase
and install, Rs.1.5 lakhs per year on an average to operate and maintain and is expected to
save Rs. 20 lakhs by reducing steam consumption (as compared to batch deodorizers), may
be calculated as follows:

Advantages:
A widely used investment criterion, the payback period seems to offer the following
advantages:
 It is simple, both in concept and application. Obviously a shorter payback generally
indicates a more attractive investment. It does not use tedious calculations.
 It favours projects, which generate substantial cash inflows in earlier years, and
discriminates against projects, which bring substantial cash inflows in later years but
not in earlier years.
Limitations:
 It fails to consider the time value of money. Cash inflows, in the payback calculation,
are simply added without suitable discounting. This violates the most basic principle
of financial analysis, which stipulates that cash flows occurring at different points of
time can be added or subtracted only after suitable compounding/discounting.

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 It ignores cash flows beyond the payback period. This leads to discrimination against
projects that generate substantial cash inflows in later years.
 It is a measure of a project's capital recovery, not profitability.
 Despite its limitations, the simple payback period has advantages in that it may be
useful for evaluating an investment.

5.2 DEPRECIATION:-
Depreciation refers to two aspects of the same concept:
 The decrease in value of assets (fair value depreciation), and
 The allocation of the cost of assets to periods in which the assets are used
(depreciation with the matching principle).
Depreciation is a fixed cost; it represents the loss of value of an asset. This loss may
be the result of physical wear and tear, chemical degradation or economic or technological
obsolescence. Since depreciation is the time dependent, it is normally expressed as a rate.
The energy equipment will normally depreciate even if the plant is shut down. The
four main methods used to calculate or express depreciation are,
5.2.1) Straight-line Depreciation
5.2.2) Sum-of-Years Digits
5.2.3) Declining-Balance Depreciation
5.2.4) Sinking Fund Depreciation

5.2.1 Straight-line Depreciation:-

The straight line method assumes that the annual depreciation is constant throughout the
service; the simplest method is referred to as a straight-line depreciation and is defined as

Where, D is the annual depreciation rate.

L is the value of equipment at the end of its useful life, commonly referred to as salvage
value.
P is the initial expenditure.
n is the life of the equipment which is determined by Internal Revenue Service guidelines.
( or )

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Straight-line depreciation is the simplest and most often used method. In this method,
the company estimates the salvage value of the asset at the end of the period during which it
will be used to generate revenues (useful life).
The salvage value is an estimate of the value of the asset at the time it will be sold or
disposed of; it may be zero or even negative. Salvage value is also known as scrap value
or residual value. The company will then charge the same amount to depreciation each year
over that period, until the value shown for the a set has reduced from the original cost to the
salvage value.

5.2.2 Sum-of-Years Digits:-

The sum of the year’s digits, like the declining balance method, results in a faster
‘write off’ during the earlier years of service and has the advantage of being applicable even
when the salvage or junk value is zero.
Another method is referred to as the sum-of-years digits. In this method the
depreciation rate is determined by finding the sum of digits using the following formula:

Where n is the life of equipment.

Each year’s depreciation rate is determined as follows:

5.2.3 Declining-Balance Depreciation:-

The declining balance method, results in a more rapid ‘write off’ during the earlier
years of service. This assumes depreciation to be a fixed fraction of the residual asset value.
The declining-balance method allows for larger depreciation charges in the early year,
which is sometimes referred to as fast write-off. The rate is calculated by taking a constant
percentage of the declining undepreciated balance. The most common method used to
calculate the declining balance is to predetermine the depreciation rate. Under certain
circumstances a rate equal to 200% of the straight-line depreciation rate may be used. Under

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other circumstances the rate is limited to 1-1/2 or 1-1 /4 times as great as straight-line
depreciation. In this method the salvage value or undepreciated book value is established
once the depreciation rate is pre-established.
To calculate the undepreciated book value, Formula is used:

Where
D is the annual depreciation rate.
L is the salvage value.
P is the first cost.

5.2.4 Sinking Fund Depreciation:-

In the sinking fund method, it is assumed that the annual depreciation is invested each
year at a given rate of interest. At the end of the service life, the accrued interest must equal
the total depreciation.

The figure compares the four methods of calculating depreciation for an asset having a
service life of 10 years.

A) Straight-line Depreciation, B) Sum-of-Years Digits, C) Declining-Balance Depreciation

D) Sinking Fund Depreciation

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5.3 NET PRESENT VALUE CALCULATIONS:-

This method is based on discounted cash flow and the net present value of a future
amount is the present capital which must be invested at a given interest rate to yield the
desired amount at some future date. It means of comparing energy projects.
(or)
The Net Present Value (NPV) of a project is the return on the investment (the sum of
the discounted cash flows) less the cost of the investment.
An investment project costing $100,000 yields an expected stream of income over a
three year period of:
Year 1 - $30,000
Year 2 - $40,000
Year 3 - $50,000
If the interest rate is 10%, the discount values (present values) can be calculated using
the technique below:

Benefits of Discounting/NPV
 Considers all cash flows
 Accounts for the time value of money and therefore considers the opportunity cost
 It is more scientific than the other methods
Limitations of NPV
 Complex to calculate
 Only as good as the original data. If the estimates of cost or net cash inflows are
wrong, so will be the NPV

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 The selection of the discount factor is crucial, but it is mostly guesswork as this rate is
constantly changing
 NPV's look deceptively accurate
 Ignores all and any non-financial factors.

5.4 TAXES AND TAX CREDIT:-

TAX:
Money paid to the government that is based on your income or the cost of goods or
services you have bought.
TAX CREDIT:
A tax credit is an amount of money that taxpayers can subtract from taxes owed to
their government. The value of a tax credit depends on the nature of the credit; certain types
of tax credits are granted to individuals or businesses in specific locations, classifications or
industries.

5.5 IMPORTANCE OF EVALUATION:-

The content of a program evaluation can cover many aspects, for instance, market
needs assessments, process evaluations, retrospective outcome/impact assessments, and
cost‐benefit evaluations. These types of evaluation studies help managers determine if timely
adjustments are needed in program design or implementation to improve the rate, or quality
of achievements relative to the committed resources. Program evaluations are in‐depth
studies of program performance and customer needs. They can be used to produce
information about the linkage between program performance and resources and about how to
improve performance.
The benefits of conducting an evaluation are numerous. For example,
1) They can help to estimate how well the program is achieving its intended
objectives
2) They help to improve the program development and implementation
3) They quantify results and cost‐effectiveness, as necessary, to help better
communicate the value of the program.
Some key definitions are described below:
PROGRAM: A project or group of projects with similar characteristics and installed in
similar applications, where multi‐faceted effects are observed and evaluated.

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EVALUATION: The performance of studies and activities aimed at determining the effects
of a program; any of a wide range of assessment activities associated with understanding or
documenting program performance, assessing program or program‐related markets and
market operations; any of a wide range of evaluative efforts including assessing
program‐induced changes in energy efficiency markets, levels of demand or energy savings,
environmental impacts, social and economic impacts and program cost‐effectiveness.
PROGRAM EVALUATIONS: Program evaluations are systematic and objective studies,
conducted periodically or on an ad hoc basis, to assess how well a program is achieving its
intended goals. These evaluations have a retrospective focus, with a view to assessing past
performance and developing recommendations for improvements, with an exception of the
evaluations of market needs that can have a current or prospective focus. Some evaluations
usually require certain level of details in data collection and analytical methodology that goes
beyond routine performance‐monitoring reporting. This helps the decision makers determine
what kinds of timely adjustments may be needed in program design or implementation to
improve the rate or quality of achievement relative to the committed resources. It is not
necessary to have in‐depth familiarity with these methods to benefit from a general program
evaluation, but program managers need to have enough familiarity to select and monitor an
evaluation contractor who will make decisions about evaluation methodologies.

5.6 MEASUREMENT AND VERIFICATION OF DEMAND SIDE

MANAGEMENT PROGRAMS:-
Energy efficient demand side management (EEDSM) programs are developed by
contracted energy analysts, or the so‐called Energy Service Companies (ESCos). As the
customer contracted program developer, an ESCo needs to make thorough investigation and
comes up with a feasible EEDSM program. The ESCo often claims certain impact from the
implementation of this EEDSM program. According to the evaluation criteria in the previous
section, the ESCo can develop the program and thus claim the relevant engineering,
environmental, social, and economic impacts of the program. Both the customer and ESCo
want to know if these claimed impacts have been achieved after implementation, therefore, as
an independent third party, the M&V team will help further to measure and verify these
claimed impacts.
The M&V process for the EEDSM program is similar to usual energy saving M&V
process in as explained below.

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1) This program evaluation guideline document is distributed to ESCos or any other

program developer. The M&V team will award a final mark to each EEDSM program at the
end of the evaluation.
2) The ESCo will develop an EEDSM program from all the engineering,
environmental, social, and economic aspects; then the ESCo claims the corresponding impact
of the program on each evaluating factor, where the impact of each evaluating factor is
claimed in either a quantitative way or a qualitative way. Examples for quantitative
achievements include the exact amount of energy saving to be achieved, the number of jobs
created each year, the reduced amount greenhouse gas emission, etc. Examples for qualitative
achievements can be statements on how the program is aligned with national economic
strategic positioning, why the program is compatible with local participation, etc.
3) The ESCo submits the M&V request to the M&V governing body (e.g. ESKOM
Energy Audit), then the governing body will allocate this request to an M&V team.
4) The M&V team prepares the scoping report to describe the overall program after
the necessary communication with the ESCo and customer.
5) The M&V team prepares the M&V plan report which needs the sign off from both
the ESCo and the client. This M&V plan includes not only key parameters to be monitored,
metering plan, but also the evaluating and marking criteria. The agreement among the ESCo,
the customer, and the M&V team must be reached on the evaluating and marking criteria. For
example, the three parties need to determine which factors need to be evaluated and the
corresponding weight that each factor occupies in the total mark; the percentages of
crediting/debiting marks awarded for over/under performing; etc.
6) The M&V team issues the baseline report according to the M&V plan, this baseline
report needs also the agreement from both the ESCo and the client. The baseline report is
based on the data and information collected from the project sites before the implementation
of the EEDSM program. Meters need to be installed to quantify baseline information in
engineering indicators, and surveys and site visit will be performed to confirm other
quantitative and qualitative baselines (or baseline marks) for other evaluation indicators. A
baseline information or baseline mark will be given for the existing situation within the
project boundary.
7) The EEDSM is implemented, and the M&V team issues the post implementation
certificate to confirm the implementation.
8) The M&V team issues the performance assessment report to evaluate if the claimed
impact has been achieved. Usually this performance assessment will be issued at least once

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and usually three times. A mark will be awarded to the assessed project in each assessment
report. The success of a program will depend on if the post‐implementation mark is higher
than the baseline mark. Baseline mark adjustment might be needed if necessary. The
principle for baseline mark adjustment is the same as the energy saving baseline adjustment
principle.
9) The M&V team will issue a series of performance tracking reports to continuously
monitor the impact from the implementation of the program after the performance assessment
reporting period. Details on the frequency and the number of performance tracking reports
can be determined by the needs of the customer and ESCo.

5.7 COST EFFECTIVENESS TEST FOR DEMAND SIDE

MANAGEMENT PROGRAMS:-
Cost-effectiveness in its simplest form is a measure of whether an investment’s
benefits exceed its costs. Key differences among the cost-effectiveness tests that are currently
used include the following:
• The stakeholder perspective of the test. Is it from the perspective of an energy efficiency
program participant, the organization offering the energy efficiency program, a non-
participating ratepayer, or society in general? Each of these perspectives represents a valid
viewpoint and has a role in assessing energy efficiency programs.
• The key elements included in the costs and the benefits. Do they reflect avoided energy
use, incentives for energy efficiency, avoided need for new generation and new transmission
and distribution, and avoided environmental impacts?
• The baseline against which the cost and benefits are measured. What costs and benefits
would have been realized absent investment in energy efficiency?
The five cost-effectiveness tests commonly used across the country are listed below:
• Participant cost test (PCT).
• Program administrator cost test (PACT).
• atepayer impact measure test ( IM).
• Total resource cost test (T C).

5.7.1 PARTICIPANT COST TEST

The PCT examines the costs and benefits from the perspective of the customer
installing the energy efficiency measure (homeowner, business, etc.). Costs include the
incremental costs of purchasing and installing the efficient equipment, above the cost of
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standard equipment, that are borne by the customer. The benefits include bill savings realized
to the customer through reduced energy consumption and the incentives received by the
customer, including any applicable tax credits. Table outlines the benefits and costs included
in the PCT. In some cases the NPV of incremental operations and maintenance costs (or
savings) may also be included. The primary use of the PCT is to assess the appeal of an
energy efficiency measure to potential participants. The higher the PCT, the stronger the
economic incentive to participate. The PCT functions similarly to a simple payback
calculation, which determines how many years it takes to recover the costs of purchasing and
installing a device through bill savings.

The PCT also provides useful information for designing appropriate customer
incentive levels. A high incentive level will produce a high PCT benefit-cost ratio, but reduce
the PACT and IM results. This is because incentives given to customers are seen as “costs”
to the utility. The PCT, PACT, and RIM register incentive payments in different ways based
on their perspective. Utilities must balance the participant payback with the goal of also
minimizing costs to the utility and ratepayers.

5.7.2 PROGRAM ADMINISTRATOR COST TEST

The PACT examines the costs and benefits of the energy efficiency program from the
perspective of the entity implementing the program (utility, government agency, nonprofit, or
other third party). The costs included in the PACT include overhead and incentive costs.
Overhead costs are administration, marketing, research and development, evaluation, and
measurement and verification. Incentive costs are payments made to the customers to offset
purchase or installations costs (mentioned earlier in the PCT as benefits). The benefits from
the utility perspective are the savings derived from not delivering the energy to customers.
Depending on the jurisdiction and type of utility, the “avoided costs” can include reduced
wholesale electricity or natural gas purchases, generation costs, power plant construction,
transmission and distribution facilities, ancillary service and system operating costs, and
other components.

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The PACT allows utilities to evaluate costs and benefits of energy efficiency
programs (and/or demand response and distributed generation) on a comparable basis with
supply-side investments. A positive PACT indicates that energy efficiency programs are
lower-cost approaches to meeting load growth than wholesale energy purchases and new
generation resources (including delivery and system costs). States with large needs for new
supply resources may emphasize the PACT to build efficiency alternatives into procurement
planning.

5.7.3 RATEPAYER IMPACT MEASURE

The RIM examines the impact of energy efficiency programs on utility rates. Unlike
typical supply-side investments, energy efficiency programs reduce energy sales. Reduced
energy sales can lower revenues and put upward pressure on retail rates as the remaining
fixed costs are spread over fewer kWh. The costs included in the RIM are program overhead
and incentive payments and the cost of lost revenues due to reduced sales. The benefits
included in the RIM are the avoided costs of energy saved through the efficiency measure
(same as the PACT). Table outlines the benefits and costs included in the RIM.

The RIM also gives an indication of the distributional impacts of efficiency programs
on non-participants. Participants may see net benefits (by lowering their bills through reduced
energy consumption) while non-participating customers may experience rate increases due to
the same programs. As the impacts on non-participating customers depend on many factors
including the timing of adjustments to rates, the RIM is only an approximation of these
impacts.

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5.7.4 TOTAL RESOURCE COST TEST

The TRC measures the net benefits of the energy efficiency program for the region as
a whole. Costs included in the TRC are costs to purchase and install the energy efficiency
measure and overhead costs of running the energy efficiency program. The benefits included
are the avoided costs of energy (as with the PACT and the RIM).

The primary purpose of the TRC is to evaluate the net benefits of energy efficiency measures
to the region as a whole. Unlike the tests describe above, the TRC does not take the view of
individual stakeholders. It does not include bill savings and incentive payments, as they yield
an intra-regional transfer of zero (“benefits” to customers and “costs” to the utility that cancel
each other on a regional level). For some utilities, the region considered may be limited
strictly to its own service territory, ignoring benefits (and costs) to neighboring areas (a
distribution-only utility may, for example, consider only the impacts to its distribution
system). In other cases, the region is defined as the state as a whole, allowing the TRC to
include benefits to other stakeholders (e.g., other utilities, water utilities, local communities).
The TRC is useful for jurisdictions wishing to value energy efficiency as a resource not just
for the utility, but for the entire region. Thus the TRC is often the primary test considered by
those states seeking to include the benefits not just to the utility and its ratepayers, but to
other constituents as well. The TRC may be considered the sum of the PCT and RIM, that is,
the participant and non-participant cost-effectiveness tests. The TRC is also useful when
energy efficiency might fall through the cracks taken from the perspective of individual
stakeholders, but would yield benefits on a wider regional level.

5.8 RATEPAYER IMPACT MEASURE TEST:-

The Ratepayer Impact Measure (RIM) test measures what happens to customer bills
or rates due to changes in utility revenues and operating costs caused by the program. Rates
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will go down if the change in revenues from the program is greater than the change in utility
costs. Conversely, rates or bills will go up if revenues collected after program implementation
is less than the total costs incurred by the utility in implementing the program. This test
indicates the direction and magnitude of the expected change in customer bills or rate levels.
Benefits and Costs:
The benefits calculated in the RIM test are the savings from avoided supply costs.
These avoided costs include the reduction in transmission, distribution, generation, and
capacity costs for periods when load has been reduced and the increase in revenues for any
periods in which load has been increased. The avoided supply costs are a reduction in total
costs or revenue requirements and are included for both fuels for a fuel substitution program.
The increase in revenues is also included for both fuels for fuel substitution programs. Both
the reductions in supply costs and the revenue increases should be calculated using net energy
savings. The costs for this test are the program costs incurred by the utility, and/or other
entities incurring costs and creating or administering the program, the incentives paid to the
participant, decreased revenues for any periods in which load has been decreased and
increased supply costs for any periods when load has been increased. The utility program
costs include initial and annual costs, such as the cost of equipment, operation and
maintenance, installation, program administration, and customer dropout and removal of
equipment (less salvage value). The decreases in revenues and the increases in the supply
costs should be calculated for both fuels for fuel substitution programs using net savings.
How the Results can be expressed:
The results of this test can be presented in several forms: the lifecycle revenue impact
(cents or dollars) per kWh, kW, therm, or customer; annual or first-year revenue impacts
(cents or dollars per kWh, kW, therms, or customer); benefit-cost ratio; and net present value.
The primary units of measurement are the lifecycle revenue impact, expressed as the change
in rates (cents per kWh for electric energy, dollars per kW for electric capacity, cents per
therm for natural gas) and the net present value. Secondary test results are the lifecycle
revenue impact per customer, first-year and annual revenue impacts, and the benefit-cost
ratio. LRIRIM values for programs affecting electricity and gas should be calculated for each
fuel individually (cents per kWh or dollars per kW and cents per therm) and on a combined
gas and electric basis (cents per customer). The lifecycle revenue impact (LRI) is the one-
time change in rates or the bill change over the life of the program needed to bring total
revenues in line with revenue requirements over the life of the program. The rate increase or
decrease is expected to be put into effect in the first year of the program. Any successive rate

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changes such as for cost escalation are made from there. The first-year revenue impact (FRI)
is the change in rates in the first year of the program or the bill change needed to get total
revenues to match revenue requirements only for that year. The annual revenue impact (ARI)
is the series of differences between revenues and revenue requirements in each year of the
program. This series shows the cumulative rate change or bill change in a year needed to
match revenues to revenue requirements. Thus, the ARIRIM for year six per kWh is the
estimate of the difference between present rates and the rate that would be in effect in year
six due to the program. For results expressed as lifecycle, annual, or first-year revenue
impacts, negative results indicate favorable effects on the bills of ratepayers or reductions in
rates. Positive test result values indicate adverse bill impacts or rate increases. Net present
value (NPVRIM) gives the discounted dollar net benefit of the program from the perspective
of rate levels or bills over some specified time period. A net present value above zero
indicates that the program will benefit (lower) rates and bills. The benefit-cost ratio (BCR
RIM) is the ratio of the total benefits of a program to the total costs discounted over some
specified time period. A benefit-cost ratio above one indicates that the program will lower
rates and bills.
Strengths of the Ratepayer Impact Measure (RIM):
Test
In contrast to most supply options, demand-side management programs cause a direct
shift in revenues. Under many conditions, revenues lost from DSM programs have to be
made up by ratepayers. The RIM test is the only test that reflects this revenue shift along with
the other costs and benefits associated with the program.
An additional strength of the RIM test is that the test can be used for all demand-side
management programs (conservation, load management, fuel substitution, and load building).
This makes the RIM test particularly useful for comparing impacts among demand-side
management options.
Some of the units of measurement for the RIM test are of greater value than others,
depending upon the purpose or type of evaluation. The lifecycle revenue impact per customer
is the most useful unit of measurement when comparing the merits of programs with highly
variable scopes (e.g.,, funding levels) and when analyzing a wide range of programs that
include both electric and natural gas impacts. Benefit-cost ratios can also be very useful for
program design evaluations to identify the most attractive programs or program elements.
If comparisons are being made between a program or group of conservation/load
management programs and a specific resource project, lifecycle cost per unit of energy and

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annual and first year net costs per unit of energy are the most useful way to express test
results. Of course, this requires developing lifecycle, annual, and first-year revenue impact
estimates for the supply-side project.
Weaknesses of the Ratepayer Impact Measure (RIM):
Test
Results of the RIM test are probably less certain than those of other tests because the
test is sensitive to the differences between long-term projections of marginal costs and long-
term projections of rates, two cost streams that are difficult to quantify with certainty. RIM
test results are also sensitive to assumptions regarding the financing of program costs.
Sensitivity analyses and interactive analyses that capture feedback effects between system
changes, rate design options, and alternative means of financing generation and non-
generation options can help overcome these limitations. However, these types of analyses
may be difficult to implement.
An additional caution must be exercised in using the RIM test to evaluate a fuel
substitution program with multiple end use efficiency options. For example, under conditions
where marginal costs are less than average costs, a program that promotes an inefficient
appliance may give a more favorable test result than a program that promotes an efficient
appliance. Though the results of the RIM test accurately reflect rate impacts, the implications
for long-term conservation efforts need to be considered.
Formulae:
The formulae for the lifecycle revenue impact (LRI RIM)' net present value (NPV
RIM), benefit-cost ratio (BCR RIM)' the first-year revenue impacts and annual revenue
impacts are presented below:

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5.9 TOTAL RESOURCE COST:-

The Total Resource Cost Test measures the net costs of a demand-side management
program as a resource option based on the total costs of the program, including both the
participants' and the utility's costs.
The test is applicable to conservation, load management, and fuel substitution
programs. For fuel substitution programs, the test measures the net effect of the impacts from
the fuel not chosen versus the impacts from the fuel that is chosen as a result of the program.
TRC test results for fuel substitution programs should be viewed as a measure of the
economic efficiency implications of the total energy supply system (gas and electric). A
variant on the TRC test is the Societal Test. The Societal Test differs from the TRC test in
that it includes the effects of externalities (e.g.,, environmental, national security), excludes
tax credit benefits, and uses a different (societal) discount rate.
Benefits and Costs:
This test represents the combination of the effects of a program on both the customers
participating and those not participating in a program. In a sense, it is the summation of the
benefit and cost terms in the Participant and the Ratepayer Impact Measure tests, where the

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revenue (bill) change and the incentive terms intuitively cancel (except for the differences in
net and gross savings).
The benefits calculated in the Total Resource Cost Test are the avoided supply costs,
the reduction in transmission, distribution, generation, and capacity costs valued at marginal
cost for the periods when there is a load reduction. The avoided supply costs should be
calculated using net program savings, savings net of changes in energy use that would have
happened in the absence of the program. For fuel substitution programs, benefits include the
avoided device costs and avoided supply costs for the energy, using equipment not chosen by
the program participant.
The costs in this test are the program costs paid by both the utility and the participants
plus the increase in supply costs for the periods in which load is increased. Thus all
equipment costs, installation, operation and maintenance, cost of removal (less salvage
value), and administration costs, no matter who pays for them, are included in this test. Any
tax credits are considered a reduction to costs in this test. For fuel substitution programs, the
costs also include the increase in supply costs for the utility providing the fuel that is chosen
as a result of the program.
How the Results can be expressed:
The results of the Total Resource Cost Test can be expressed in several forms: as a net
present value, a benefit-cost ratio, or as a levelized cost. The net present value is the primary
unit of measurement for this test. Secondary means of expressing TRC test results are a
benefit-cost ratio and levelized costs. The Societal Test expressed in terms of net present
value, a benefit cost ratio, or levelized costs is also considered a secondary means of
expressing results. Levelized costs as a unit of measurement are inapplicable for fuel
substitution programs, since these programs represent the net change of alternative fuels
which are measured in different physical units (e.g.,, kWh or therms). Levelized costs are
also not applicable for load building programs. Net present value (NPVTRC) is the
discounted value of the net benefits to this test over a specified period of time. NPVTRC is a
measure of the change in the total resource costs due to the program. A net present value
above zero indicates that the program is a less expensive resource than the supply option
upon which the marginal costs are based. The benefit-cost ratio (BCRTRC) is the ratio of the
discounted total benefits of the program to the discounted total costs over some specified time
period. It gives an indication of the rate of return of this program to the utility and its
ratepayers. A benefit-cost ratio above one indicates that the program is beneficial to the
utility and its ratepayers on a total resource cost basis. The levelized cost is a measure of the

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total costs of the program in a form that is sometimes used to estimate costs of utility-owned
supply additions. It presents the total costs of the program to the utility and its ratepayers on a
per kilowatt, per kilowatt hour, or per therm basis levelized over the life of the program. The
Societal Test is structurally similar to the Total Resource Cost Test. It goes beyond the TRC
test in that it attempts to quantify the change in the total resource costs to society as a whole
rather than to only the service territory (the utility and its ratepayers). In taking society's
perspective, the Societal Test utilizes essentially the same input variables as the TRC Test,
but they are defined with a broader societal point of view. More specifically, the Societal Test
differs from the TRC Test in at least one of five ways. First, the Societal Test may use higher
marginal costs than the TRC test if a utility faces marginal costs that are lower than other
utilities in the state or than its out-of-state suppliers. Marginal costs used in the Societal Test
would reflect the cost to society of the more expensive alternative resources. Second, tax
credits are treated as a transfer payment in the Societal Test, and thus are left out. Third, in
the case of capital expenditures, interest payments are considered a transfer payment since
society actually expends the resources in the first year. Therefore, capital costs enter the
calculations in the year in which they occur. Fourth, a societal discount rate should be used7.
Finally, Marginal costs used in the Societal Test would also contain externality costs of
power generation not captured by the market system. An illustrative and by no means
exhaustive list of ‘externalities and their components’ is given below ( efer to the
Limitations section for elaboration.) These values are also referred to as ‘adders’ designed to
capture or internalize such externalities. The list of potential adders would include for
example:
1. The benefit of avoided environmental damage: The CPUC policy specifies two ‘adders’ to
internalize environmental externalities, one for electricity use and one for natural gas use.
Both are statewide average values. These adders are intended to help distinguish between
cost-effective and non cost-effective energy-efficiency programs. They apply to an average
supply mix and would not be useful in distinguishing among competing supply options. The
CPUC electricity environmental adder is intended to account for the environmental damage
from air pollutant emissions from power plants. The CPUC-adopted adder is intended to
cover the human and material damage from sulfur oxides (SOX), nitrogen oxides (NOX),
volatile organic compounds (VOC, sometimes called reactive organic gases or ROG),
particulate matter at or below 10 micron diameter (PM10), and carbon. The adder for natural
gas is intended to account for air pollutant emissions from the direct combustion of the gas.
In the CPUC policy guidance, the adders are included in the tabulation of the benefits of

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energy efficiency programs. They represent reduced environmental damage from displaced
electricity generation and avoided gas combustion. The environmental damage is the result of
the net change in pollutant emissions in the air basins, or regions, in which there is an impact.
This change is the result of direct changes in power plant or natural gas combustion emission
resulting from the efficiency measures, and changes in emissions from other sources, that
result from those direct changes in emissions.
2. The benefit of avoided transmission and distribution costs – energy efficiency measures
that reduce the growth in peak demand would decrease the required rate of expansion to the
transmission and distribution network, eliminating costs of constructing and maintaining new
or upgraded lines.
3. The benefit of avoided generation costs – energy efficiency measures reduce consumption
and hence avoid the need for generation. This would include avoided energy costs, capacity
costs and T&D line
4. The benefit of increased system reliability: The reductions in demand and peak loads from
customers opting for self generation, provide reliability benefits to the distribution system in
the forms of:
a. Avoided costs of supply disruptions
b. Benefits to the economy of damage and control costs avoided by customers and industries
in the digital economy that need greater than 99.9 level of reliable electricity service from the
central grid
c. Marginally decreased System Operator’s costs to maintain a percentage reserve of
electricity supply above the instantaneous demand
d. Benefits to customers and the public of avoiding blackouts.
5. Non-energy benefits: Non-energy benefits might include a range of program-specific
benefits such as saved water in energy-efficient washing machines or self generation units,
reduced waste streams from an energy-efficient industrial process, etc.
6. Non-energy benefits for low income programs: The low income programs are social
programs which have a separate list of benefits included in what is known as the ‘low income
public purpose test’. This test and the sepcific benefits associated with this test are outside the
scope of this manual.
7. Benefits of fuel diversity include considerations of the risks of supply disruption, the
effects of price volatility, and the avoided costs of risk exposure and risk management.

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Strengths of the Total Resource Cost Test:

The primary strength of the Total Resource Cost (TRC) test is its scope. The test
includes total costs (participant plus program administrator) and also has the potential for
capturing total benefits (avoided supply costs plus, in the case of the societal test variation,
externalities). To the extent supply-side project evaluations also include total costs of
generation and/or transmission, the TRC test provides a useful basis for comparing demand-
and supply-side options. Since this test treats incentives paid to participants and revenue
shifts as transfer payments (from all ratepayers to participants through increased revenue
requirements), the test results are unaffected by the uncertainties of projected average rates,
thus reducing the uncertainty of the test results. Average rates and assumptions associated
with how other options are financed (analogous to the issue of incentives for DSM programs)
are also excluded from most supply side cost determinations, again making the TRC test
useful for comparing demand-side and supply-side options.
Weakness of the Total Resource Cost Test:
The treatment of revenue shifts and incentive payments as transfer payments,
identified previously as a strength, can also be considered a weakness of the TRC test. While
it is true that most supply-side cost analyses do not include such financial issues, it can be
argued that DSM programs should include these effects since, in contrast to most supply
options, DSM programs do result in lost revenues. In addition, the costs of the DSM
"resource" in the TRC test are based on the total costs of the program, including costs
incurred by the participant. Supply-side resource options are typically based only on the costs
incurred by the power suppliers. Finally, the TRC test cannot be applied meaningfully to load
building programs, thereby limiting the ability to use this test to compare the full range of
demand-side management options.
Formulas:
The formulas for the net present value (NPVTRC)' the benefit-cost ratio (BCRTRC
and levelized costs are presented below:

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5.10 PARTICIPANT COST TEST:-

The Participants Test is the measure of the quantifiable benefits and costs to the
customer due to participation in a program. Since many customers do not base their decision
to participate in a program entirely on quantifiable variables, this test cannot be a complete
measure of the benefits and costs of a program to a customer.
Benefits and Costs:
The benefits of participation in a demand-side program include the reduction in the
customer's utility bill(s), any incentive paid by the utility or other third parties, and any
federal, state, or local tax credit received. The reductions to the utility bill(s) should be
calculated using the actual retail rates that would have been charged for the energy service
provided (electric demand or energy or gas). Savings estimates should be based on gross
savings, as opposed to net energy savings.

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In the case of fuel substitution programs, benefits to the participant also include the
avoided capital and operating costs of the equipment/appliance not chosen. For load building
programs, participant benefits include an increase in productivity and/or service, which is
presumably equal to or greater than the productivity/ service without participating. The
inclusion of these benefits is not required for this test, but if they are included then the
societal test should also be performed.
The costs to a customer of program participation are all out-of-pocket expenses
incurred as a result of participating in a program, plus any increases in the customer's utility
bill(s). The out of pocket expenses include the cost of any equipment or materials purchased,
including sales tax and installation; any ongoing operation and maintenance costs; any
removal costs (less salvage value); and the value of the customer's time in arranging for the
installation of the measure, if significant.

How the Results can be expressed:

The results of this test can be expressed in four ways: through a net present value per
average participant, a net present value for the total program, a benefit-cost ratio or
discounted payback.
The primary means of expressing test results is net present value for the total
program; discounted payback, benefit-cost ratio, and per participant net present value are
secondary tests.
The discounted payback is the number of years it takes until the cumulative
discounted benefits equal or exceed the cumulative discounted costs. The shorter the
discounted payback, the more attractive or beneficial the program is to the participants.
Although "payback period" is often defined as undiscounted in the textbooks, a discounted
payback period is used here to approximate more closely the consumer's perception of future
benefits and costs. Net present value (NPVp) gives the net dollar benefit of the program to an
average participant or to all participants discounted over some specified time period. A net
present value above zero indicates that the program is beneficial to the participants under this
test. The benefit-cost ratio (BCRp) is the ratio of the total benefits of a program to the total
costs discounted over some specified time period. The benefit-cost ratio gives a measure of a
rough rate of return for the program to the participants and is also an indication of risk. A
benefit-cost ratio above one indicates a beneficial program.
Strengths of the Participant Test:

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The Participants Test gives a good "first cut" of the benefit or desirability of the
program to customers. This information is especially useful for voluntary programs as an
indication of potential participation rates.
For programs that involve a utility incentive, the Participant Test can be used for
program design considerations such as the minimum incentive level, whether incentives are
really needed to induce participation, and whether changes in incentive levels will induce the
desired amount of participation.
These test results can be useful for program penetration analyses and developing
program participation goals, which will minimize adverse ratepayer impacts and maximize
benefits.
For fuel substitution programs, the Participant Test can be used to determine whether
program participation (i.e. choosing one fuel over another) will be in the long-run best
interest of the customer. The primary means of establishing such assurances is the net present
value, which looks at the costs and benefits of the fuel choice over the life of the equipment.
Weaknesses of the Participant Test:
None of the Participant Test results (discounted payback, net present value, or benefit-
cost ratio) accurately capture the complexities and diversity of customer decision-making
processes for demand-side management investments. Until or unless more is known about
customer attitudes and behavior, interpretations of Participant Test results continue to require
considerable judgment. Participant Test results play only a supportive role in any assessment
of conservation and load management programs as alternatives to supply projects.
Formulae:
The following are the formulas for discounted payback, the net present value (NPVp)
and the benefit-cost ratio (BCRp) for the Participant Test.

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5.11 PROGRAM ADMINISTRATOR COST TEST:-

The Program Administrator Cost Test measures the net costs of a demand-side
management program as a resource option based on the costs incurred by the program
administrator (including incentive costs) and excluding any net costs incurred by the
participant. The benefits are similar to the TRC benefits. Costs are defined more narrowly.
Benefits and Costs:
The benefits for the Program Administrator Cost Test are the avoided supply costs of
energy and demand, the reduction in transmission, distribution, generation, and capacity
valued at marginal costs for the periods when there is a load reduction. The avoided supply
costs should be calculated using net program savings, savings net of changes in energy use
that would have happened in the absence of the program. For fuel substitution programs,
benefits include the avoided supply costs for the energy-using equipment not chosen by the
program participant only in the case of a combination utility where the utility provides both
fuels. The costs for the Program Administrator Cost Test are the program costs incurred by
the administrator, the incentives paid to the customers, and the increased supply costs for the
periods in which load is increased. Administrator program costs include initial and annual
costs, such as the cost of utility equipment, operation and maintenance, installation, program
administration, and customer dropout and removal of equipment (less salvage value). For fuel
substitution programs, costs include the increased supply costs for the energy-using
equipment chosen by the program participant only in the case of a combination utility, as
above. In this test, revenue shifts are viewed as a transfer payment between participants and
all ratepayers. Though a shift in revenue affects rates, it does not affect revenue requirements,
which are defined as the difference between the net marginal energy and capacity costs
avoided and program costs. Thus, if NPVpa > 0 and NPV IM < 0, the administrator’s overall
total costs will decrease, although rates may increase because the sales base over which
revenue requirements are spread has decreased.
How the Results can be expressed:
The results of this test can be expressed either as a net present value, benefit-cost
ratio, or levelized costs. The net present value is the primary test, and the benefit-cost ratio
and levelized cost are the secondary tests.
Net present value (NPVpa) is the benefit of the program minus the administrator's
costs, discounted over some specified period of time. A net present value above zero
indicates that this demand-side program would decrease costs to the administrator and the
utility.

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The benefit-cost ratio (BCRpa) is the ratio of the total discounted benefits of a
program to the total discounted costs for a specified time period. A benefit-cost ratio above
one indicates that the program would benefit the combined administrator and utility's total
cost situation. The levelized cost is a measure of the costs of the program to the administrator
in a form that is sometimes used to estimate costs of utility-owned supply additions. It
presents the costs of the program to the administrator and the utility on per kilowatt, per
kilowatt-hour, or per therm basis levelized over the life of the program.
Strengths of the Program Administrator Cost Test
As with the Total Resource Cost test, the Program Administrator Cost test treats
revenue shifts as transfer payments, meaning that test results are not complicated by the
uncertainties associated with long-term rate projections and associated rate design
assumptions. In contrast to the Total Resource Cost test, the Program Administrator Test
includes only the portion of the participant's equipment costs that is paid for by the
administrator in the form of an incentive. Therefore, for purposes of comparison, costs in the
Program Administrator Cost Test are defined similarly to those supply-side projects which
also do not include direct customer costs.
Weaknesses of the Program Administrator Cost
Test
By defining device costs exclusively in terms of costs incurred by the administrator,
the Program Administrator Cost test results reflect only a portion of the full costs of the
resource. The Program Administrator Cost Test shares two limitations noted previously for
the Total Resource Cost test: (1) by treating revenue shifts as transfer payments, the rate
impacts are not captured, and (2) the test cannot be used to evaluate load building programs.
Formulas
The formulas for the net present value, the benefit-cost ratio and levelized cost are
presented below:

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