Energy Conservation and Management

ME-PRODUCTION ENERGY CONSERVATION & MANAGEMENT
EXPERIMENT NO :- 1
Date :
AIM: - TO STUDY ABOUT ENERGY SCENARIO AND CONSERVATION
ENERGY SCENARIO:
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.
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
Source Extraction Processing Primary energy Secondary
primary energy sources are
Energy
coal, oil, natural gas, and Open Steam
Coal Preparation Coal
biomass (such as wood). Other or Deep
Mines Thermal
primary energy sources Coke
Purification
available include nuclear
energy from radioactive Hydro
substances, thermal energy
stored in earth’s interior, and Nuclear Power
Electricity
Mining Enrichment Station
potential energy due to earth’s
gravity. The major primary and
secondary energy sources are
Natural gas
shown in Figure 1.1 Gas Well Treatment Natural gas
Primary energy sources are Thermal

LPG
mostly converted in industrial Petroleum Oil
Cracking Petrol
and Steam
utilities into secondary energy Well
Refining Diesel/fuel oils
sources; for example coal, oil Petrochemical
or gas converted into steam
And electricity.
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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 fertiliser plants.
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.
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 1.2). 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
Figure 1.2 Renewable and Non-Renewable Energy
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 Global Primary Energy Reserves*
 Coal
The proven global coal reserve was estimated to be 9,84,453 million
tonnes by end of 2003. The USA had the largest share of the global
reserve (25.4%) followed by Russia (15.9%), China (11.6%). India was
4th in the list with 8.6%.
 Oil
The global proven oil reserve was estimated to be 1147 billion barrels by the end of 2003. Saudi
Arabia had the largest share of the reserve with almost 23%.
(One barrel of oil is approximately 160 litres)
 Gas
The global proven gas reserve was estimated to be 176 trillion cubic metres by
the end of 2003. The Russian Federation had the largest share of the reserve
with almost 27%.
(*Source: BP Statistical Review of World Energy, June 2004)
World oil and gas reserves are estimated at just 45 years and 65 years
respectively. Coal is likely to last a little over 200 years
Global Primary Energy Consumption
The global primary energy consumption at the end of 2003 was equivalent to 9741 million
tonnes of oil equivalent (Mtoe). The Figure 1.3 shows in what proportions the sources
mentioned above contributed to this global figure.
World primary energy consumption
BP Statistical Review of World Energy 2004 © BP
Figure 1.3 Global Primary Energy Consumption
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The primary energy consumption for few of the developed and developing countries are shown
in Table 1.1. 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 1.1: Primary Energy Consumption by Fuel , 2009

In Million tonnes oil equivalent
Oil Natural Coal Nuclear Hydro Total
Country Gas Energy electric
USA 914.3 566.8 573.9 181.9 60.9 2297.8
Canada 96.4 78.7 31.0 16.8 68.6 291.4
France 94.2 39.4 12.4 99.8 14.8 260.6
Russian Federation 124.7 365.2 111.3 34.0 35.6 670.8
United Kingdom 76.8 85.7 39.1 20.1 1.3 223.2
China 275.2 29.5 799.7 9.8 64.0 1178.3
India 113.3 27.1 185.3 4.1 15.6 345.3
Japan 248.7 68.9 112.2 52.2 22.8 504.8
Malaysia 23.9 25.6 3.2 - 1.7 54.4
Pakistan 17.0 19.0 2.7 0.4 5.6 44.8
Singapore 34.1 4.8 - - - 38.9
TOTAL WORLD 3636.6 2331.9 2578.4 598.8 595.4 9741.1
Energy Distribution Between Developed And Developing Countries
Although 80 percent of the world’s

population lies in the developing countries
(a fourfold population increase in the past
25 years), their energy consumption
amounts to only 40 percent of the world
total energy consumption. The high
standards of living in the developed
countries are attributable to high-energy
consumption levels. Also, the rapid
population growth in the developing
countries has kept the per capita energy
consumption low compared with that of
highly industrialized developed countries. Figure 1.4: Energy Distribution Between Developed
The world average energy consumption and Developing Countries
per person is equivalent to 2.2 tonnes of
coal. In industrialized countries, people use four to five times more than the world average, and
nine times more than the average for the developing countries. An American uses 32 times more
commercial energy than an Indian.
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Indian Energy Scenario:

Coal dominates the energy mix in India, contributing to 55% of the total primary energy
production. Over the years, there has been a marked increase in the share of natural gas in
primary energy production from 10% in 1994 to 13% in 1999. There has been a decline in the
share of oil in primary energy production from 20% to 17% during the same period.
Energy Supply
Coal Supply
India has huge coal reserves, at least 84,396 million tonnes of proven recoverable reserves (at
the end of 2003). This amounts to almost 8.6% of the world reserves and it may last for about
230 years at the current Reserve to Production (R/P) ratio. In contrast, the world’s proven coal
reserves are expected to last only for 192 years at the current R/P ratio.
Reserves/Production (R/P) ratio- If the reserves remaining at the end of the year are divided by
the production in that year, the result is the length of time that the remaining reserves would last
if production were to continue at that level.
India is the fourth largest producer of coal and lignite in the world. Coal production is
concentrated in these states (Andhra Pradesh, Uttar Pradesh, Bihar, Madhya Pradesh,
Maharashtra, Orissa, Jharkhand, West Bengal).
Oil Supply
Oil accounts for about 36 % of India's The ever rising import bill
total energy consumption. India today is Year Quantity (MMT) Value (Rs Crore)
one of the top ten oil-guzzling nations in 1996-97 33.90 18,337
the world and will soon overtake Korea as 1997-98 34.49 15,872
the third largest consumer of oil in Asia 1998-99 39.81 19,907
after China and Japan. The country’s 1999-00 57.80 40,028
annual crude oil production is peaked at 2000-01 74.10 65,932
about 32 million tonne as against the 2001-02 84.90 8,116
current peak demand of about 110 million 2002-03 90 85,042
tonne. In the current scenario, India’s oil 2003-04 95 93,159
consumption by end of 2007 is expected *2004-05 100 1,30,000
to reach 136 million tonne(MT), of which * Estimated
domestic production will be only 34 MT. Source: Ministry of Petroleum and Natural Gas
India will have to pay an oil bill of
roughly $50 billion, assuming a weighted average price of $50 per barrel of crude. In 2003-04,
against total export of $64 billion, oil imports accounted for $21 billion. India imports 70% of
its crude needs mainly from gulf nations. The majority of India's roughly 5.4 billion barrels in
oil reserves are located in the Bombay High, upper Assam, Cambay, Krishna-Godavari. In terms
of sector wise petroleum product consumption, transport accounts for 42% followed by
domestic and industry with 24% and 24% respectively. India spent more than Rs.1,10,000 crore
on oil imports at the end of 2004.
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 Natural Gas Supply

Natural gas accounts for about 8.9 per cent of energy consumption in the country. The current
demand for natural gas is about 96 million cubic metres per day (mcmd) as against availability
of 67 mcmd. By 2007, the demand is expected to be around 200 mcmd. Natural gas reserves are
estimated at 660 billion cubic meters.
 Electrical Energy Supply
The all India installed capacity of electric power generating

stations under utilities was 1,12,581 MW as on 31st May 2004,
consisting of 28,860 MW- hydro, 77,931 MW - thermal and
2,720 MW- nuclear and 1,869 MW- wind (Ministry of Power).
The gross generation of power in the year 2002-2003 stood at 531
billion units (kWh).
 Nuclear Power Supply
Nuclear Power contributes to about 2.4 per cent of electricity generated in India. India has ten
nuclear power reactors at five nuclear power stations producing electricity. More nuclear
reactors have also been approved for construction.
 Hydro Power Supply
India is endowed with a vast and viable hydro potential for power generation of which only 15%
has been harnessed so far. The share of hydropower in the country’s total generated units has
steadily decreased and it presently stands at 25% as on 31st May 2004. It is assessed that
exploitable potential at 60% load factor is 84,000 MW.
 Final Energy Consumption
Final energy consumption is the actual energy demand at the user end. This is the difference
between primary energy consumption and the losses that takes place in transport, transmission
& distribution and refinement. The actual final energy consumption (past and projected) is given
in Table 1.2.
Table 1.2 DEMAND FOR COMMERCIAL ENERGY FOR FINAL CONSUMPTION (BAU SCENARIO)
Source Units 1994-95 2001-02 2006-07 2011-12
Electricity Billion Units 289.36 480.08 712.67 1067.88
Coal Million Tonnes 76.67 109.01 134.99 173.47
Lignite Million Tonnes 4.85 11.69 16.02 19.70
Natural Gas Million Cubic Meters 9880 15730 18291 20853
Oil Products Million Tonnes 63.55 99.89 139.95 196.47
Source: Planning Commission BAU:_Business As Usual
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 Sector wise Energy Consumption in India
The major commercial energy consuming sectors in the

country are classified as shown in the Figure 1.5. As seen
from the figure, industry remains the biggest consumer of
commercial energy and its share in the overall consumption
is 49%.
Figure 1.5 Sector Wise Energy

 Energy Needs of Growing Economy: Consumption (2007-2008)
Economic growth is desirable for developing countries, and energy is essential for economic
growth. However, the relationship between economic growth and increased energy demand is
not always a straightforward linear one. For example, under present conditions, 6% increase in
India's Gross Domestic Product (GDP) would impose an increased demand of 9 % on its energy
sector.
In this context, the ratio of energy demand to GDP is a useful indicator. A high ratio reflects
energy dependence and a strong influence of energy on GDP growth. The developed countries,
by focusing on energy efficiency and lower energy-intensive routes, maintain their energy to
GDP ratios at values of less than 1. The ratios for developing countries are much higher.
 India’s Energy Needs

The plan outlay vis-à-vis share of energy is given in Figure 1.6. As seen from the Figure, 18.0%
of the total five-year plan outlay is spent on the energy sector.
PLANWISE OUTLAY
Figure 1.6 Expenditure Towards Energy Sector
 Per Capita Energy Consumption

The per capita energy consumption (see Figure 1.7) 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.
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Primary energy consumption per capita
BP Statistical Review of World Energy 2004 © BP
Energy Intensity
Energy intensity is energy consumption per unit of GDP. Energy intensity indicates the
development stage of the country. India’s energy intensity is 3.7 times of Japan, 1.55 times of
USA, 1.47 times of Asia and 1.5 times of World average.
Long Term Energy Scenario For India:

 Coal
Coal is the predominant energy source for power production in India, generating approximately
70% of total domestic electricity. Energy demand in India is expected to increase over the next
10-15 years; although new oil and gas plants are planned, coal is expected to remain the
dominant fuel for power generation. Despite significant increases in total installed capacity
during the last decade, the gap between electricity supply and demand continues to increase.
The resulting shortfall has had a negative impact on industrial output and economic growth.
However, to meet expected future demand, indigenous coal production will have to be greatly
expanded. Production currently stands at around 290 Million tonnes per year, but coal demand
is expected to more than double by 2010. Indian coal is typically of poor quality and as such
requires to be beneficiated to improve the quality; Coal imports will also need to increase
dramatically to satisfy industrial and power generation requirements.
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 Oil
India's demand for petroleum products is likely to rise from 97.7 million tonnes in 2001-02 to
around 139.95 million tonnes in 2006-07, according to projections of the Tenth Five-Year Plan.
The plan document puts compound annual growth

rate (CAGR) at 3.6 % during the plan period.
Domestic crude oil production is likely to rise
marginally from 32.03 million tonnes in 2001-02
to 33.97 million tonnes by the end of the 10th plan
period (2006-07). India’s self sufficiency in oil has
consistently declined from 60% in the 50s to 30%
currently. Same is expected to go down to 8% by
2020. As shown in the figure 1.8, around 92% of
India’s total oil demand by 2020 has to be met by
imports. Figure 1.8 India’s Oil
 Natural Gas
India's natural gas production is likely to rise from 86.56 million cmpd in 2002-03 to 103.08
million cmpd in 2006-07. It is mainly based on the strength of a more than doubling of
production by private operators to 38.25 mm cmpd.
 Electricity
India currently has a peak demand shortage of around 14% and an energy deficit of8.4%.
Keeping this in view and to maintain a GDP (gross domestic product) growth of 8% to 10%,
the Government of India has very prudently set a target of 215,804 MW power
Table 1.3 India’s Perspective Plan For Power For Zero Deficit Power By 2011/12
(Source Tenth And Eleventh Five-Year Plan Projections)
Nuclear
Thermal Gas / LNG / Hydro Total(MW)
(MW)
(Coal) (MW Diesel (MW) (MW)
Installed
capacity as on Gas: 10,153
61,157 2720 25,116 100,010
March 2001 Diesel: 864
Additional
53,333 20,408 9380 32,673 115,794
capacity
114,490
Total capacity as on 31,425 12,100 57,789 215,804
(53.0%)
March 2012 (14.6%) (5.6%) (26.8%)
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 Energy Conservation and its Importance
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 (see
Figure 1.13).
What is Energy Conservation?

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, be 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, consumption or comfort levels. Promotion of
energy efficiency will contribute to energy conservation and is therefore an integral part of
energy conservation promotional policies.
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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)
means you will use only 1/4th of the energy to light a room. Pollution levels also reduce
by the same amount (refer Figure 1.14).
Nature sets some basic limits on how efficiently energy can be used, but in most cases our
products and manufacturing processes are still a long way from operating at this
theoretical limit. Very simply, energy efficiency means using less energy to perform the same
function.
Although, energy efficiency has been in practice ever since the first oil crisis in 1973, it has
today assumed even more importance because of being the most cost-effective and reliable
means of mitigating the global climatic change. Recognition of that potential has led to high
expectations for the control of future CO2 emissions through even more energy efficiency
improvements than have occurred in the past. The industrial sector accounts for some 41 per
cent of global primary energy demand and approximately the same share of CO2 emissions. The
benefits of Energy conservation for various players are given in Figure 1.15.
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EXPERIMENT NO :- 2
Date:
AIM: STUDY OF THERMAL PERFORMANCE OF EXISTING BUILDING.
Heat loss and Heat Gain:
 Heat Loss :
The typical home owner would like the inside of their house to be around 72º on the inside in the
winter. This is called the Winter Inside Design Temperature. However, because it is cold outside,
heat travels through the building envelope, the walls, windows and ceilings to the outside. This
heat is lost by conduction. Also, cold winter air leaks into the house and warm air leaks out. This is
called infiltration.
There is a continuous movement of heat from the inside to the outside, which is measured in units
called BTUs (British Thermal Units). The speed of the movement of heat is called the Heat Loss
and is measured in BTUH, which means BTUs per Hour.
If it is 72º inside the house and 52º outside then the 20º temperature differential will cause a
certain number of BTUs to leave the house each hour, let’s say that that number is 9,768 BTUH.
The heat loss of this house at 52º is 9,768 BTUH. This means that your heating system needs to
produce 9,768 BTUs each hour to keep the house at 72º, when it is 52º outside.
If it is even colder outside, then the house will lose more heat each hour, the heat loss will be
higher. When selecting a heating system, at what outside temperature do you need to know the
heat loss? Well, this of course depends on where you live, how cold your winters are. The
temperature to use as an outside temperature is called the Winter Outside Design Temperature.
This is the temperature, say 10º for instance, at which only 2 ½% of the time is colder than 10º.
The heat loss of the house when calculated with an outside temperature of the Winter Outside
Design Temperature is called the Design Heat Loss. Because the heat loss at any temperature
other than the design temperature is not really a relevant number, we usually just say Heat Loss,
rather than Design Heat Loss.
So, to recap, the Heat Loss of the house is the number of BTUs lost each hour when the house is at
the Inside Design temperature inside and the outside is at the Winter Outside Design Temperature.
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Fig: 1
The factors affecting heat loss:
1. Temperature difference : Reducing the inside temperature and moving to a warmer climate are
two ways to reduce heat loss
2. Area of the building envelope: Smaller houses have lower heat losses than larger ones.
3. Thermal Resistance: Adding insulation to the walls and ceiling (increasing R-value) slows the
movement of heat, thus reducing heat loss.
4. Tightness: Better window frames, sealing cracks particularly around doors reduces infiltration
as does better fireplaces
 Heat Gain:
Heat loss is made up of the heat lost by conduction through the building envelope and infiltration.
Heat Gain occurs in the summer time. Heat Gain is made up of
1. Heat gained by conduction (through walls, windows, ceilings etc)
2. Heat gained by infiltration (warm outside air coming in, cool inside air leaking out)
3. Moisture gained by infiltration (moist outside air coming in, dryer air leaving)
4. Radiation from the sun, either direct or indirect, through windows, glass doors and skylights.
5. Heat and moisture given off by people.
6. Heat given off by appliances.
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Fig:2
So you can see that heat gain is a little more complex. Notice that items 1 and 2 are directly related
to the temperature of the outside air, just like their counterparts in winter heat loss calculations, but
items 3, 4, 5 and 6 occur no matter what the outside temperature is.
To make things a little more complex, heat gain calculations take moisture into account as part of
the Design Heat Gain. Fortunately, a computer program like HVAC-Calc handles this complexity
for you.
 Sensible Gain and Latent Gain
The heat gain associated with the temperature of the air is called the Sensible Heat Gain. The heat
gain associated with the water in the air that leaks in due to infiltration and the water that
evaporates from people’s skin as well as the moisture in their breath is called the Latent Heat Gain.
If you add up the Sensible Gain and the Latent Gain you get the Total Heat Gain.
There is a Total Heat Gain at every outside design condition however the one of interest is the
Total Design Heat Gain at the outside Summer Design Conditions.
The Summer Design Conditions consist of more than just the outside temperature. They consist of
the Summer Design Temperature (only 2½ % of time warmer than this) and Summer Moisture
Content (measured in grains of water per pound of air, typical Houston 113, New York 98), Daily
Temperature Range (High, Medium or Low). The daily range is a measurement of how the
temperature varies during the day. A high daily range means temperatures start cool in the
morning, hot in midday and cool down at night. A high daily range will result in a lower heat gain
than a low daily range where it starts out hot and stays hot all day.
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With a computer program such as HVAC-Calc, the Summer Design Conditions and Winter Design
Conditions for hundreds of cities are built in to the program. You select them once and then forget
it.
There is also an additional unit of measurement that is used to describe the cooling capacity of air
conditioners and that is the "Ton". One Ton is 12,000 BTU per hour (BTUH). It comes from the
number of BTU’s absorbed by a ton of ice melting in 24 hours. If you have a heat gain of 30,000
BTUH then you would need to remove 30,000 BTUH in order to keep the house at the indoor
design temperature of say 75.
You could remove the 30,000 BTUs each hour by setting up some fans to blow the inside air over
a mountain of ice, being sure to completely melt 2 ½ tons each day. Or you can install a 2 ½ ton
air conditioner. Due to the difficulty of obtaining ice these days and the problems associated with
drinking two and a half tons of ice water each day, most people will choose the 2 ½ ton air
conditioner.
 Cooling and Heating Load Calculations:
The calculation of the cooling and heating loads on a building or zone is the most important step in
determining the size and type of cooling and heating equipment required to maintain comfortable
indoor air conditions. Building heat and moisture transfer mechanisms are complex and as
unpredictable as the weather and human behavior, both of which strongly influence load
calculation results. Some of the factors that influence results are:
Conduction/convection of heat through walls, roofs, floors, doors and windows.

Radiation through windows and heating effects on wall and roof surface temperatures.
Thermal properties of buildings (Insulation, glass transmittance, surface absorbtivity.
Building thermal mass and corresponding delay of indoor temperature change.
Construction quality in preventing air, heat, and moisture leakage.
Heat added/lost with ventilation air needed to maintain air quality (code compliance).
Heat generated by lights, people, appliances, and equipment.
Heat added/lost by air, water, and refrigeration distribution systems.
Heat generated by air and water distribution equipment.
Moisture added/lost with ventilation air to maintain air quality and code compliance.
Moisture movement through building envelope.
Moisture generated by occupants and equipment.
Activity level, occupancy patterns, and make- up (male, female, child) of people.
Acceptable comfort and air quality levels of occupants.
Weather conditions (temperature, moisture, wind speed, latitude, elevation, solar radiation,
etc.)
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These many factors combine to force engineers to develop procedures that minimize the load
calculation complexity without compromising accuracy. A combination of measured data and
detailed simulations have generated techniques that can be done with a pocket calculator and a
one-page form or more complex numerical simulations that take hours to complete using modern
computers. However, many assumptions and simplifications must be made for all methods.
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17
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 CALCULATION PROCEDURE:
1. For reference purposes, record customer’s name, address and phone number in the spaces
provided.
2. Record inside and outside design temperatures in the spaces provided and calculate the
temperature differences Use local code or practices or ACCA Manual J* as a guide.
3. Measure total area of windows and doors and record for each construction in Tables A and B.
Total area at the bottom of Table A should equal total area at the bottom of Table B. Multiply
each area by its appropriate factor.
4. Find gross wall area by multiplying total length of exposed walls by ceiling height. Use more
than one line, if needed, for different types of wall construction. Record on gross wall line in
sq. ft. column of Construction Data.
5. Subtract total Windows and Doors area from Gross Wall area. Record under Net Walls.
6. Record exposed ceiling area.
7. Record exposed floor area. If floor is concrete slab or floor of heated crawl space, record linear
feet of exposed perimeter.
8. Select proper heat transfer multipliers from Table C (additional U factors for heating can be
obtained from ACCA Manual J, Table 2, by using the 100° temperature difference column in
the manual and dividing by 100. This represents the U factor. Cooling factors can be obtained
directly from Tables 4 and 5 of Manual J. Record factors in their proper columns.
9. Multiply area by their factors and enter in the BTUH loss and BTUH gain columns.
10. Record number of people (usually based on 2 people per bedroom) and multiply by 300. Enter
total in BTUH gain column.
11. Total the BTUH loss and gain columns and record as sensible total. Heat loss total represents
loss per degree temperature difference. Heat gain total represents entire sensible load not
including latent load (moisture removal).
12. Multiply heat loss by design temperature difference that you selected as your Design Condition
for heating. Multiply heat gain by 1.3 latent heat factors. Record on Sub-Total line.
13. If a large percentage of ductwork is not in the conditional space, multiply the BTUH Loss and
Gain Sub-Totals by the duct loss/gain factors. This becomes your total BTUH HEAT LOSS
AND HEAT GAIN for equipment selection.
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 The CLTD/CLF Method
Many engineers use some form of the Cooling Load Temperature Difference/Cooling. Load Factor
(CLTD/CLF) method. The combined effects of convection, conduction, radiation, and thermal lag
for opaque surfaces are combined into a modification of the conduction equation:
q UA CLTD
An array of CLTD tables are used to account for thermal mass, insulation levels, latitude, time of
day, direction, temperature swing, and other variables. CLF factors are used to account for the fact
that building thermal mass creates a time lag between heat generation from internal sources
(lighting, people, appliances, etc.) and the corresponding cooling load. CLF factors are presented
in a set of tables that account for number of hours the heat has been on, thermal mass, type of floor
covering and window shading, number of walls, and the presence of ventilation hoods. A CLF
represents the fraction of the heat gain that is converted to cooling load.
q qIntLoad CLF
Solar gains through glass are computed in a similar manner with introduction of Solar Cooling
Load (SCL) factors with the units of heat rate per unit area that are tabularized by facing direction
(N, E, S, W, Horz.) and latitude. The fraction of solar gain that is transmitted is accounted for with
a shading coefficient (SC) to correct for transmittance and shading devices.
q A SC SCL
All of these factors are summed and added to some estimate of the latent (dehumidification) load
to arrive at the cooling load. Recent publications have devoted little attention to the heating loads
in larger buildings, since they are often small even in colder climates due to the internal heat
generation of equipment. The most recent version of the ASHRAE Handbook of Fundamentals
(2001) contains a one-half page discussion of heating load which provides only minimal guidance.
More detailed discussions are provided for residential buildings in the Handbook and the parallel
Manual J Load Calculation published by the Air Conditioning Contractors of America (ACCA).
However, increased attention to heating load calculations are warranted due to the growing
awareness of the need of adequate ventilation air at all times to maintain indoor air quality (IAQ).
The recommended ventilation rates in high occupancy buildings often exceed the heat losses from
all other components combined.
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 Factors Affecting Thermal Performance

Environmental concerns and the rising cost of fuel mean that there is an increased focus on the
minimisation of energy use during the natural occupational life of a building. The thermal
performance of the building envelope can make a significant contribution to reducing the overall
building energy usage.
Reducing operational carbon emissions from buildings is imperative in the drive to combat global
warming. The European Union Energy Performance of Buildings Directive (EPBD, 2002/91/EC),
published in 2002, aims to promote building energy efficiency across the whole EU, and requires
energy performance to be calculated to a national standard.
In response, the 2006 revisions to Part L of the Building Regulations (Conservation of Fuel and
Power) in England and Wales is projected to save over 1 million tonnes of carbon emissions by
2010 and incorporates a new National Calculation Methodology for non-domestic buildings.
Enhanced thermal performance of the building envelope, both in terms of improved insulation and
air-tight construction, plays a key role in minimising energy use for heating and cooling and hence
in reducing carbon emissions.
 CO2 emissions targets can be met by a combination of means, such as:

Efficient insulation and better detailing of the building envelope.
Air-tight construction of the building envelope.
Energy efficient appliances and fittings (e.g. boilers and lighting).
Automatic controls and building management systems.
Use of zero-emission technologies such as solar water heating and photovoltaics.
Over the years, well-proven cladding systems have been developed using pre-finished steel for the
outer and/or inner skin of the building envelope. Highly insulated, air-tight cladding systems, with
well designed junctions and interfaces can make a significant contribution to reducing the overall
carbon emissions of a building over its lifetime.
 Refurbishment:
―Reasonable improvement‖ for the conservation of fuel and power shall be made whenever
building work is being carried out, where it is ―cost effective‖ according to criteria contained in
ADL2B. Any extension or significant refurbishment to a building, must meet defined criteria,
documented within ADL2B, including improvements to the existing building.
21
Established pre-finished steel over cladding and other refurbishment solutions are available to
meet these requirements.
Heat can escape through the building envelope by direct heat transfer through the walls, roof,
floors and windows, both through the insulation itself and through direct paths of lower thermal
resistance called thermal bridges.
 Air-tightness:
The air-tightness of a building envelope has a direct effect upon the energy performance of the
building High levels of air infiltration through joints, interfaces, doors, windows and service
penetrations will add to heating and air conditioning loads and consequently to CO2 emissions and
energy bills.
High air leakage levels will account for a substantial proportion of energy losses for the occupier.
Conversely, good air-tightness in a building reduces capital spend on heating and cooling systems,
also reducing running costs. Air leakage typically accounts for 25-50% of the heat loss from a
building.
 Solar gain:
Under the 2006 revision of part L2, it is mandatory to consider the effects of solar gain, in order to
minimise the need for air conditioning. It requires approximately 3 to 4 times as much energy to
cool a building, as it does to heat it. It is therefore essential that potential causes of overheating are
minimised by:
Reduced incidence of direct sunlight (through roof lights and windows).
Provision of well designed solar shading.
Use of natural or assisted ventilation to reduce reliance on air conditioning.
The effects of solar gain need to be balanced against the benefits of natural day lighting.
Modelling packages can be used to predict the natural lighting levels throughout the day/year
within a building for varying areas and orientation or roof lights and windows.
Large areas of roof lights can lead to excessive solar gain causing the building to overheat.
Roof light areas greater than 15% will almost certainly lead to a certain amount of overheating.
For low energy design, the lowest sensible lighting level should be specified.
Most roof lights will need to be triple skin to achieve the limiting U value standard of 2.2
W/m2K as specified in the latest building regulations.
22
For large single storey buildings, 10% roof light area can be considered as a good practical
starting point when considering a daylight requirement.
 Thermal bridging:
A thermal bridge is a localised area of lower thermal resistance in the building envelope resulting
in higher heat flow and lower internal surface temperatures. Repeating thermal bridges, such as
fasteners, must be included in the U-value calculation, whereas non-repeating thermal bridges such
as flashings must be accounted for separately.
One type of thermal bridge occurs when any non-insulative material penetrates the insulated layer
and becomes a heat conduction path. Examples of this include fixings, brick ties, lintels, composite
cladding junctions, brackets in built-up cladding, window and door frames, cantilevers for
balconies, and roof beam supporting overhangs. Thermal bridging also occurs as a result of
building geometry. For example, corners can also be thermal bridges, providing a heat flow path
from both adjoining walls, as are panel joints and other design features.
As well as increasing heat loss from the building envelope, thermal bridging can cause localised
condensation as surface temperatures may be reduced below the dew point (condensation
temperature) of the air in the space. This is a particular danger in buildings where the Relative
Humidity (RH) may be high, such as canteens, laundries, swimming pools and some factories.
The relatively high thermal conductivity of steel (approximately 52 W/mK) means that careful
detailing is required to ensure that thermal bridging does not occur in certain applications.
 U-values:
In the UK, the U-value concept is used to quantify heat loss through plane elements of the building
envelope. This U-value is defined as the overall thermal transmittance of a particular construction
element (a wall or a roof for example), including the effect of surface resistance. It depends upon
the thickness and thermal conductivity of its component layers and, in the case of air cavities, the
emissivity of the surfaces.
U-values are measured in W/m2K, and the lower the value the better the thermal performance. U-
values of simple constructions can be calculated readily but for constructions with integral thermal
bridges such as light gauge steel framing, the method becomes more complex. BS EN ISO 6946
contains approved calculation methods. There are also software tools validated by the Building
Research Establishment (BRE) available to perform U-value calculations using accepted
approximation methods.
23
EXPERIMENT : 3
Date:
AIM: MODERN TECHNIQUES IN ENERGY CONSERVATION
Need for energy conservation:

There is actuate shortage of energy in the world now a days, the demand of energy is increased
rapidly as listed below.
Year energy consumed
1) 1960 13.27 * 10^12

2) 1965 16.34*10^12
3) 1970 21.69*10^12
4) 1975 23.39*10^12
5) 1980 29.63*10^12
6) 1985 35.09*10^12
7) 1990 41.65*10^12
In view of limited resources and ever increasing demand of energy ,it is essential to find out the
major areas for use of energy so that the capability of energy in various fields can be analyzed and
inefficient energy consumption can be minimized
Method of energy conservation

The prospect of depleting fossil fuel supplies and progressive degradation of the environment has
turned world attention to various aspect of energy use, in the process of upgrading the living
standards man has been consuming more and more energy to satisfy his material wants, coupled
with the degradation of forests, lands, ever increasing consumption of commercial energy sources
has been contributing to the pollution of air, water and soil,
Energy being a major requirement of modern society , its development and management carries a
lot of significance in the economic development of any country. There is a close relationship
between the level of energy consumption in country and its economic development, energy is
required for domestic use, agriculture, industry, commerce, transport, and in almost every sphere
of life,
Since two oil shocks during last two decades, awareness of efficient use of energy has increased
specially in the developed countries, ,due to lake of political will, paucity of capital and failure to
adopt newer energy efficient technologies have hindered the progress towards better energy
efficiency, moreover the environment has received much less attention than it deserves.
24
Energy conservation can be define as the reduction of energy use per unit of product, changing
from a secure fuel to a more readily available fuel, through conserervation measure in industry
would be different from those in the domestic sector, the final aim is to conserve depleting natural
resources.
The inter ministerial working group of energy set up by the government of India estimated that
energy saving potential of 25% is presently exiting in industrial sector. This was mainly by
introducing short and medium term measures. If long term measure such as co-generation, boiler
replacement, process modification, and advanced control are included the potential would be much
higher.
 Efficiency improvement in thermal power plant
1) Saving in auxiliaries:- the average all India auxiliaries power consumption in thermal
plants during 1990-91 was around 10%, with concerned effort , it may be possible to
reduce it by 1%, saving potential on account of 1% reduction in auxiliary power
consumption will be 13000 million units and additional revenue on account of above will
be Rs. 1027 crore considering average rate Rs 1 per KWh. This one example is sufficient to
insist the importance of energy conservation.
2) Saving potential in coil and oil:- the present average specific coal consumption on all
India basis of thermal power stations 0.72kg/kWh, with improvement in thermal efficiency
,it may not be difficult to bring down the specific coal consumption level to 0.70kg/kWh in
the country .saving in coal consumption with reduction of 0.02kg/kWh in specific coal
consumption during VIII plan was 24 million tones and saving of the order of Rs
1200crores taking coal price as Rs 500 per tone
3) Plant load factor improvement:- the present PLF of the thermal power plant is around
54%, with the implementation of renovation and modernization programmed and other
necessary measure, it is possible to increase PLF by 3%.Additional generation due to
increase in PLF from 54% to 57% will be 13000 million units,
4) Modern method of thermal power plant generation:- a few modern method like co
generation FBD and new boiler design and control system and non conventional energy
uses, are presently under consideration and applications in Indian power industry.
This is a trend to use natural gas or crude oil instead of low grade coal for power generation as
pollution hazard from this sources are less than the use of coal these substitution fuels are used
mostly In gas turbine plants whole coal based thermal efficiency is considerably low than
conventional thermal plants.
 Energy audit
The main purpose of energy audit is to establish quickly and reliably the basic relative costs of the
various forms of energy purchased, their main uses and to identify the principle locations where
losses, wastages or inefficiency occurs.
25
There are five basic steps involved in energy audit as described below
Step 1 Evolve comprehensive energy management policy.
The first step in energy conservation is to take a decision that it must be done, what target can be
set and in what time frame, these are to be achieved. The fig shows the energy management chart.
Step 2 conducting a detailed energy audit.
The next step is to identify all forms of energy being used and to carry out an audit for each type
of energy used.
An energy audit identifies the cost of energy and where and how it is used. It will identify
The amount or energy expended in a process with the help of mass and energy balance for each
process. Then energy flow diagram is prepared showing the quantity, form, source and quality
(temperature) of the energy required for various processes. Next step is to make a critical analysis
for energy used and energy wasted. This is followed by identification of potential areas for energy
conservation.
A typical energy audit of a factory would be as shown in fog. Experience with energy audits in
different plants indicate the more common causes leading to inefficient energy use as listed below
in table.
Primary losses Secondary losses

Leaks through lining (fuel, steam , water) Exhaust gases (from stack of furness, boiler)
Faulty Traps (wrong types, over sizing, poor Condensate and flash steam (steam heated
maintenance) system)
Faulty combustion (excess air, poor fuel, air Blow down (from boiler and process vessels)
pressure, insufficient burner)
Overheating (absence of control) Hot effluents (waste liquoirs)
Overcooling (faulty controll) Cooling water (to cooling tower)
Excessive ventilation
Low power factor, excessive lighting
26
Detailed formats for conducting energy audits in typical areas including energy cost evaluation,
boiler house energy consumption, checklist for heat generation, distribution and consumption are
provided at the end. Similar format can be developed for all other activities using energy.
Step 3.
The efficiency of energy utilization varies with the specific industrial operations, the materials
produced and nature of manufacturing operation. Therefore, an effective energy conservation
program has to be undertaken.
Initial measures to conserve energy(fuel and electricity) in each plant are just to follow the
operating practices listed in previous table which can result in as much 10 to 15% saving with no
capital investment. Higher saving upto 30 to 40% can be achieved with capital investment on
major energy saving schemes. Energy consumption even can be halved if the problem is tackled in
a scientific and methodical manner.
27
A positive plan of action should be undertaken after analysis then detail design work is to be
carried out to draw up the specification for practical modification of the existing processes.
Step 4 Implementation of energy conservation program.
Implementation of energy conservation measures will yield saving but pilot scale projects should
be undertaken to establish their technical feasibility.
Step 5 Reviews of achievements.
Proper measurement and control systems are to be incorporated to monitor the performance of the
equipments used for energy conservation. Monthly review of all important parameters responsible
for energy conservation should be conducted be conducted to ensure that the program is
progressing in the right direction.
The management of energy system used in each industry like energy saving in buildings, energy
saving in boilers, energy optimization by scheduling the loading and grid load distribution are
some example where energy management is required for energy conservation.
Many publications are available to study in details the management techniques used for each
industry and each process in industry. To discuss all these in one text is not possible and that is not
the purpose of this text except to bring out the methodology used for energy conservation.
Keeping in view the resource constraints, new generation capacity has limited scope. The trust
areas of energy conservation energy management and optimal utilization of existing installed
capacities/facilities have vast potential for energy saving/improvement and involve comparatively
less capital investment .these areas must be given greater attention and high priority to mitigate the
anticipated power shortages during IX th and subsequent plan periods. During VII the plan,
renovation and modernization program of thermal power stations was accorded a high priority and
benefits achieved form it wear very encouraging. The plant load factor during VIIth plan increased
form 50% to56.5% and an additional generation of about 10000 million units was reportedly
achieved form old thermal sets which underwent substantial renovation and modernization . the
implementation of concrete time bound action plans in the key areas discussed above can also
yield encouraging result if high priority is accorded to them and concrete and determined effort
made in the implementation of these programs.
 Energy Management Control Systems

An energy management control system (EMCS) is a centralized computer control system that is
intended to operate a facility’s equipment efficiently. Energy management systems can be applied
as part of many of the energy saving measures of the Energy Conservation Manual.
These systems are still evolving rapidly, and they are controversial. This Note will keep you out of
trouble by explaining the important issues. The most important issue is whether or not to install a
28
system. Some applications are appropriate for computer control systems, and many are not. A
range of simpler alternatives are available.
You will learn the advantages of building automation systems, including monitoring, report
generation, and remote control of equipment. You will also learn the pitfalls, including system
cost, skilled staffing requirements, software limitations, vendor support, rapid obsolescence, and
lack of standardization.
These systems are also known by a variety of other names, including ―energy management
systems‖ (EMS), ―smart building controls,‖ ―building automation system‖ (BAS), etc. A system
typically has a central computer, distributed microprocessor controllers (called ―local panels‖,
―slave panels‖, ―terminal equipment controllers‖, and other names), and a digital communication
system. The communication system may carry signals directly between the computer and the
controlled equipment, or there may be tiers of communications. The Note illustrates these
variations.
 Application requirements
As opposed to a batch data processing environment, real-time sensor based applications require
some special user interfaces to
29
Interfaces must be defined between the user device (control point) and the digital and analog
hardware input/output addresses on the computer.
Decisions must be made regarding alarm scanning frequency, program scheduling for alarm and
normal functions, priority assignments, and system resource allocation.
Programs must be scheduled according to application requirements, such as controlled device

cycling in energy management applications.
A multiprogramming executive interface to the system supervisor must provide all time-dependent
inputs with assigned priority levels and specify which programs are to occupy which partitions, in
order to optimize memory usage.
Files of different sizes on bulk memory (disk or diskette) must be allocated for the
 The digital computer performs the following functions:

Monitors power consumption from one or more power meters, comparing it with time-dependent
target and maximum consumptions. When specified targets are exceeded, selected devices are
turned off for periods specified by the user.
Turns devices on and off according to the time of day, and periodically cycles devices during their
on period, as during the first shift.
Monitors large numbers of alarm-condition points and overrides control of one or more devices
according to whether the alarm points are on or off. Alarm conditions may arise if values of
temperature, pressure, or flow in air conditioning equipment exceed limits, or if the environmental
temperature or humidity exceeds limits, or if the security of an area is violated.
Controls inlet air dampers based on outside air enthalpy; adjusts device of times according to
outdoor temperature and interfaces to control panels in facility control rooms.
Analog Dialogue 43-01, January (2009) 1
 Technology for energy conservation

To expanding the technologies for energy conservation, developing new techniques for next-
generation products that are even more energy-efficient. We work closely with our customers to
clearly define the performance and energy parameters they require. Through close cooperation,
can optimize the solutions to help make energy-efficient designs that are easy to develop, speed
time to market and are more attractive to end consumers.
The products designed to improve energy conservation, while helping to meet our performance
goals for applications such as:
Industrial motor control
®
• Enabled by our high-performance DSCs and ColdFire and Power Architecture™ embedded
controllers
30
Domestic large appliances

• Enabled by our high-performance DSCs, MCUs & Sensors
Building automation
• Enabled by our high performance ColdFire Ethernet embedded controllers, wireless
ZigBee/802.15.4 compliant solutions, low-power MCUs and sensors
Digital power supplies
• Enabled by our high-performance DSCs, MCUs and sensors
Remote power management and metering
• Enabled by our high-performance Flexis™ series of HCS08 and ColdFire V1 MCUs and ZigBee
compatible solutions
Audio and video consumer products
• Enabled by our SMARTMOS™ analog power management chip sets, i.MX processors and
sensors
Factory automation
• Enabled by our ColdFire, Power Architecture and wireless IEEE(R) 802.15.4 compliant solutions
Automotive braking energy regeneration
Automotive hybrid engine control
Automotive alternator and starter technology
Petrol and diesel engine control.
• All enabled by our high-performance microprocessors (MPUs) and MCUs built on Power
Architecture technology
 Introducing advanced technology:
Improving the energy conservation of motor-driven systems can be achieved by replacing less
efficient motors or by introducing advanced-technology variable speed drives. Existing, less
efficient drives often use a universal motor or single-phase AC induction motor with simple
control. This can be quite inexpensive; however the low precision speed and torque control can not
facilitate today’s advanced control algorithms that can help improve performance and energy
conservation. In addition, universal motors typically operate at a low 60-70 percent conservation
range, whereas brushless DC or 3-phase AC motors, with more advanced electronic control, can
achieve an operating conservation of 85-95 percent. Introducing variable speed drives across the
industrial segment can also achieve significant improvements in operating efficiencies and energy
consumption. A conventional pumping system, for example, has an conservation level of a mere
31 percent because considerable energy is wasted through the mechanical valve. Replacing the
valve with a variable-speed drive can dramatically improve liquid flow control as pump speeds are
adjusted. The operating conservation of a pumping system with variable-speed drive can help you
reach up to 72 percent co
31
 Co generation
Cogeneration (also combined heat and power, CHP) is the use of a heat engine or
a power station to simultaneously generate both electricity and useful heat.
All power plants emit a certain amount of heat during electricity generation. This can be
released into the natural environment through cooling towers, flue gas, or by other means. By
contrast CHP captures some or all of the by-product heat for heating purposes, either very close to
the plant, or especially in Scandinavia and eastern Europe as hot water for district heating with
temperatures ranging from approximately 80 to 130 °C. This is also called Combined Heat and
Power District Heating or CHPDH. Small CHP plants are an example of decentralized energy.
In the United States, Con Edison distributes 30 billion pounds of 350 °F/180 °C steam each
year through its seven cogeneration plants to 100,000 buildings in Manhattan the biggest steam
district in the United States. The peak delivery is 10 million pounds per hour (corresponding to
approx. 2.5 GW) This steam distribution system is the reason for the steaming manholes often
seen in "gritty" New York movies.
Other major cogeneration companies in the U.S. include Recycled Energy
Development[4] and leading advocates include Tom Casten and Amory Lovins.
By-product heat at moderate temperatures (212-356°F/100-180°C) can also be used
in absorption chillers for cooling. A plant producing electricity, heat and cold is sometimes
called trigeneration or more generally: polygeneration plant.[5] Cogeneration is
a thermodynamically efficient use offuel. In separate production of electricity some energy must
be rejected as waste heat, but in cogeneration this thermal energy is put to good use
Introduction
Masnedø CHP power station in Denmark. This station burns straw as fuel. The adjacent
greenhouses are heated by district heating from the plant.
Thermal power plants (including those that use fissile elements or burn coal, petroleum, or natural
gas), and heat engines in general, do not convert all of their thermal energy into electricity. In most
heat engines, a bit more than half is lost as excess heat (see: Second law of
thermodynamics and Carnot's theorem). By capturing the excess heat, CHP uses heat that would
be wasted in a conventional power plant, potentially reaching an efficiency of up to 89%,
compared with 55%[6] for the best conventional plants. This means that less fuel needs to be
consumed to produce the same amount of useful energy.
Some tri-cycle plants have used a combined cycle in which several thermodynamic cycles
produced electricity, and then a heating system was used as a condenser of the power
plant's bottoming cycle. For example, the RU-25 MHD generator inMoscow heated a boiler for a
conventional steam powerplant, whose condensate was then used for space heat. A more modern
system might use a gas turbine powered by natural gas, whose exhaust powers a steam plant,
whose condensate provides heat. Tri-cycle plants can have thermal efficiencies above 80%.
The viability of CHP (sometimes termed utilisation factor), especially in smaller CHP
installations, depends upon a good baseload of operation, both in terms of an on-site (or near site)
electrical demand and heat demand. In practice, an exact match between the heat and electricity
needs rarely exists. A CHP plant can either meet the need for heat (heat driven operation) or be run
32
as a power plant with some use of its waste heat. The latter being least advantageous in terms of its
utilization factor and thus overall efficiency. The viability can be greatly increased where
opportunities for trigeneration exist. In such cases the heat from the CHP plant is also used as a
primary energy source to deliver cooling by means of an absorption.
CHP is most efficient when the heat can be used on site or very close to it. Overall efficiency is
reduced when the heat must be transported over longer distances. This requires heavily insulated
pipes, which are expensive and inefficient; whereas electricity can be transmitted along a
comparatively simple wire, and over much longer distances for the same energy loss.
A car engine becomes a CHP plant in winter, when the reject heat is useful for warming the
interior of the vehicle. This example illustrates the point that deployment of CHP depends on heat
uses in the vicinity of the heat engine.
Cogeneration plants are commonly found in district heating systems of cities, hospitals, prisons,
oil refineries, paper mills, wastewater treatment plants, thermal recovery wells and industrial
plants with large heating needs.
Thermally enhanced oil recovery (TEOR) plants often produce a substantial amount of excess
electricity. After generating electricity, these plants pump leftover steam into heavy oil wells so
that the oil will flow more easily, increasing production. TEOR cogeneration plants in Kern
County, California produce so much electricity that it cannot all be used locally and is transmitted
to Los Angeles [citation needed].
CHP is one of the most cost efficient methods of reducing carbon emissions of heating in cold
climates.
Types of plants
Topping cycle plants primarily produce electricity from a steam turbine. The exhausted steam is
then condensed, and the low temperature heat released from this condensation is utilized for
e.g. district heating or water desalination.
Bottoming cycle plants produce high temperature heat for industrial processes, then a waste heat
recovery boiler feeds an electrical plant. Bottoming cycle plants are only used when the industrial
process requires very high temperatures, such as furnaces for glass and metal manufacturing, so
they are less common.
Large cogeneration systems provide heating water and power for an industrial site or an entire
town. Common CHP plant types are:
Gas turbine CHP plants using the waste heat in the flue gas of gas turbines. The gaseous fuel used
is typically natural gas
Gas engine CHP plants (in the US "gaseous fuelled") use a reciprocating gas engine which is
generally more competitive than a gas turbine up to about 5 MW. The gaseous fuel used is
normally natural gas. These plants are generally manufactured as fully packaged units that can be
installed within a plantroom or external plant compound with simple connections to the site's gas
supply and electrical distribution and heating systems. Typical large example see [8]
Biofuel engine CHP plants use an adapted reciprocating gas engine or diesel engine, depending
upon which biofuel is being used, and are otherwise very similar in design to a Gas engine CHP
plant. The advantage of using a biofuel is one of reduced hydrocarbon fuel consumption and thus
33
reduced carbon emissions. These plants are generally manufactured as fully packaged units that
can be installed within a plantroom or external plant compound with simple connections to the
site's electrical distribution and heating systems. Another variant is the wood gasifier CHP plant
whereby a wood pellet or wood chip biofuel is gasified in a zero oxygen high temperature
environment; the resulting gas is then used to power the gas engine. Typical smaller size biogas
plant see [9]
Combined cycle power plants adapted for CHP
Steam turbine CHP plants that use the heating system as the steam condenser for the steam
turbine.
Molten-carbonate fuel cells and solid oxide fuel cells have a hot exhaust, very suitable for heating.
Nuclear Power plants can be fitted with steam drains after the high, mid, and/or low pressure
turbines to provide heat to a heat system. With a heat system temperature of 95°C it is possible to
extract about 10 MW heat for every MW electricity lost. With a temperature of 130°C the gain is
slightly smaller, about 7 MW for every MWe lost.[10]
Smaller cogeneration units may use a reciprocating engine or Stirling engine. The heat is removed
from the exhaust and the radiator. These systems are popular in small sizes because small gas and
diesel engines are less expensive than small gas- or oil-fired steam-electric plants.
Some cogeneration plants are fired by biomass,[11] or industrial and municipal
waste (see incineration).
 Heat recovery steam generator
A Heat Recovery Steam Generator (HRSG) is a steam boiler that uses hot exhaust gases from
the gas turbines or reciprocating engines in a CHP plant to heat up water and generatesteam. This
steam in turn drives a steam turbine and/or is used in industrial processes that require heat.
HRSGs used in the CHP industry are distinguished from conventional steam generators by the
following main features:
The HRSG is designed based upon the specific features of the gas turbine or reciprocating engine
that it will be coupled to.
Since the exhaust gas temperature is relatively low, heat transmission is accomplished mainly
through convection.
The exhaust gas velocity is limited by the need to keep head losses down. Thus, the transmission
coefficient is low, which calls for a large heating surface area.
Since the temperature difference between the hot gases and the fluid to be heated (steam or water)
is low, and with the heat transmission coefficient being low as well, the evaporator and
economizer are designed with plate fin heat exchangers
34
 Topping cycle
A schematic diagram of a topping cycle is shown in Figure

The topping cycle consists of a high pressure steam boiler and turbine generator with the high
pressure turbine exhausting steam to one or more low pressure steam turbine generators. High
pressure topping turbines are usually installed as an addition to an existing lower pressure steam
electric plant
35
The bottoming cycle consists of a low pressure steam boiler and turbine generator with the low
pressure turbine exhausting steam to one or more high pressure steam turbine generators. Low
pressure bottoming turbines are usually installed as an addition to an existing high pressure steam
electric plant.
36
EXPERIMENT NO :- 4
Date:
AIM: INNOVATIVE ENERGY MANAGEMENT TO REDUCE
ELECTRICITY COST AND INCREASE PROFIT MARGIN.
Innovative Energy Management techniques to reduce electricity cost.

In the current business scenario, with increasing competition and narrowing
margins, innovativeenergy management techniques can substantially reduceelectricity
cost and translate into significant increase in profit margin particularly for the energy
intensive industries. Today electricity costs are the most controllable variable and are
easier to reduce as compared to other factors such as material, labour, interest and
depreciation. To achieve savings in electricity bills is at the core of strategic business
decisions, especially for energy-intensive entities where competitive advantage is often
influenced by energy costs. Studies indicate that by implementing innovative energy
management system Indian industries can reduce electricity cost varying from 10 to 60 per
cent if they employ right strategies and technologies.
Energy management can be broadly classified into demand side and supply side
management. While the former deals with making specific changes in energy consumption
patterns to save electricity without affecting the existing output levels, the latter involves
cost-effective and reliable supply of power. The choice ofinnovative measures for
energy management in the industries that work best for an enterprise to reduce
its electricity bills and optimize its profit margin are highly specific to the particular firm or
production unit. In service and manufacturing sector, heating, ventilating and air
conditioning, electric motors provide huge opportunities to the enterprises to rationalise
demand. Most of the measures in this segment comprise re-engineering or retro-fitting to
reduce thermal load. The various innovative energy management techniquesto reduce
electricity consumption include, using variable frequency drives (VFD) for pumps,
replacing old motors with energy efficient motors, replacing insulations to prevent
radiation loss from heat carrying surfaces, optimising the chiller-running hours etc.
Lighting is another area that has wide scope to save electricity substantially. The typical
37
energy management measures in this context, involve use of Compact Fluorescent Lamps,
energy efficient electronic ballasts etc. through replacement or retrofits. The pay back
period is generally short, ranging from 18 months to 24 months, thus making the process
economically attractive.
On the supply side of energy management, self generation in key energy-intensive

industries in India ranges from 50 to 100 per cent of the total power consumption. Then
there are also small commercial entities that deploy back-up power units to compensate for
grid power shortages. Large industrial users typically benefit from lower unit costs arising
from economies of scale in self-generation. For small entities the advantages lie in business
continuity from back-up power. Such local generation solutions not only ensure reliable
power supply but also avoid system losses transmission and distribution network and
eventually reduce electricity cost.
Not all the above measures under energy management programs to reduceelectricity
costs require huge investments but needs development of an investment plan to achieve
energy efficiency where ever necessary. Measures such as installation of VFDs, optimising
voltage and frequencies of own generation and fine-tuning of existing pumps and motors
involve very low levels of investment that are capable of generating high levels of energy
and financial savings. These measures are especially advantageous for the large numbers of
small firms that have limited capital to invest in expensive energy
management technologies.
Overall, the objective of the energy management program is to identify and study the
potential areas and to carry out analysis with measured data in order to evaluate the energy
cost savings potential and the investment required to implement the innovative techniques
of energy management. In India, many early adopters of Energy Monitoring and
Management Systems (EM&MS) in both manufacturing and service sectors through the
providers of energy managementservices, have seen results in the form of considerable
reduction in electricity costs that seem to suggest that the payback period for availing such
services is actually in weeks and months and not in years.
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How To Reduce Your Energy Bil

Reduce Energy Usage
In these tough times the end of the month when you receive all your bills is probably the day you
dread the most. I know I hate coming home on a Friday afternoon at the end of the month only to
be confronted with enormous electricity bills. In times like these you should really start thinking
about what you can do to reduce your energy usage so you can have cheaper electricity bills. In
this article we are going to share some great tips on what you can do to reduce your energy
usage and achieve your goal of cheaper electricity. The first thing you need to think about if you
want to reduce your electricity bill is to get your family/room-mates on board. You don’t want to
be known as the crazy person running around switching off light builds and recycling things out of
the trash if no one else in the family is willing to make the sacrifice with you. The best bet with
room-mates is to reiterate the fact that a reducing energy usage will reduce the electricity bill,
which will give them more disposable income to spend on whatever they want, it may be hard to
make the electricity bill of an apartment cheaper than it already is, but it is possible to reduce your
electricity bill, even in an apartment!. With your family the situation is a bit tougher especially
with small children explaining electricity usage to children is not the easiest of tasks. After
explaining on how to reduce energy usage maybe set some goals. When your family achieves
these goals you could set a reward for the whole family. Suggest tips on how to reduce electricity
usage, but also interact with your family and see what ideas they come up with to cheapen your
electricity bill.
Electric Bill
Cheaper Electricity Bills

We all remember the obvious things that we can do to reduce electricity, but you need to think
about the small things that you can do to ensure that you have a cheaper electricity bill. Does your
refrigerator really need to be on the coldest setting that you have it on? Reducing the temperature
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on your refrigerator could have an immediate impact on making your electricity bill cheaper. Little
things like this are what can cut your electricity bill by an insane amount.
Before you can start making immediate savings you would need to make your house more energy
efficient. You need to get rid of all your incandescent light bulbs, and incandescent lamp and
replace them with more energy efficient light bulbs. It may seem like a pain in the short term to be
spending money to reduce your electricity bill, but in the long term the energy efficient light bulbs,
not only last longer but they also use less electricity so that every month you will see a savings on
your electricity bill.
You can also buy energy saver gadgets that gauge which appliances are either using too much
electricity or those that you do not need to keep on all the time. These gadgets help you control
and reduce your electricity usage.
Energy Efficient appliances
A lot of you may be thinking that you can’t reduce your electricity usage because you have so
many appliances that use electricity. We are living in a world of iPhones, iPods, iTouchs, coffee
makers, microwaves, laptops, flat screen TV’s, and computers but the thing is the electricity usage
is not directly rated to the number of electrical appliances present in your house but the it is related
to the way that you use them.
Here are a few tips on what you can do to reduce the electricity usuage on some common
appliances that consume a lot of electricity:
Only use the washing machine when you have a full wash ready to go
Try to turn off your boiler/geyser when it is not being used
Air conditioning is what causes an increase in tropical places like Florida and
California; try to keep it at the minimum that you need to keep cool. You do not need to turn your
house into an igloo
Make sure to turn off your computer monitor when not in use, it uses a lot of power and takes
just a second
To switch off
Lower the setting on your fridge
An appliance on standby mode is not the same an appliance that is switched off.
Produce Your Own Electricity
My last recommendation is for lowering your electricity bill is to take the benefit of reading some
reports and guides, one that I have found really well written and explaining everything is
called Earth4Energy, it has some great solutions on what you can do to generate electricity at
home and get some free or cheap electricity for you home appliances. It has helped me reduce my
electricity bill by half. You need to try to reduce your requirements for electricity by using
renewable energy using natural resources like wind, solar, thermal, these sources are cheaper than
standard electricity and provide long term return, not just for your wallet but also for the
environment. For more information check out Earth4Engery.
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Tips on How to Lower and Reduce your Electricity Costs by Half
Tips on how to save electric costs by half

During this hard time when many people are feeling the financial limitations, it prudent to cut
costs on our electricity consumption and costs, below are tips to reduce electricity costs
Tip1: Never leave electrical consuming gadgets on, ensure that all electrical appliances including
TV, Computers, radios, stereo, iron boxes, amplifiers are turned off, this will reduce electricity
costs, all appliances should be turned off at the surge protector. Turning appliances off at the strip
control ensures that devices like modem which normal consumes electricity are none consuming,
this will greatly reduce your electrical costs
Tip2: Use energy saving bulbs for lightening your houses, energy saving bulbs are more
economical than ordinary bulbs and are known to provide high quality light with less energy,
energy saving bulbs will reduce your lightening consumption by half hence lower electricity costs
Tip3: Ensure that all the lamp shade you are using are clean, having lamp shades with white
interior provide maximum light, this will greatly reduce your electricity costs and bills
Tip4: Your security lights that are outside the house should have a detectors, it is advisable to
install timer switches like the local authority does for their public lights, this will reduce electricity
costs by ensuring that electricity are only on when needed and at the right time
Tip5: Always close the refrigerator door, as open it causes the refrigerator to consume more
electricity to provide cooling effect. Closing your refrigerator ensures that cool air are not let out
does reduce the amount of electricity consume hence will lead to reduction in our electricity costs
Tip6: When boiling water, use your electric kettle, do not use cooker as they will take too long to
boil hence increasing your electricity costs
Tip7: Use your microwaves oven to warm food as they are faster and simple to use, they heat up
faster compare to cookers. Microwaves electrical consumption is greatly lower than the cookers;
this allows you to save half your electricity costs. Microwaves are more efficient and cook faster
than normal oven
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Tip8: Do not waste your freezer space, ensure that it is always full; this allows for maximum
utilization of energy consumed by the freezer hence will greatly serve you better
Tip9: unfreeze food in the on the open air or refrigerator rather than on the Microwaves, this
might take more time but you will save electricity costs by half, unfreezing food in the
Microwaves consume a lot of energy
Tip10: Lastly to save your electricity costs by 50% do all the above tips one by one and remember
never to put hot food in your fridge, doing this will increase your electricity costs great, since hot
food will requires much energy to cool off.
Setting up an energy management scheme.
This checklist provides guidance for those wishing to control the amount of energy consumed by
their company or organisation. Organisations are under increasing pressure to reduce costs and
protect the environment. Energy can be costly and harm the environment. All organisations use it,
and many see it as a `fixed cost' that cannot be reduced. However, there are ways in which the
amount of energy used can be reduced, leading to savings, and a successful energy management
scheme can produce benefits both for the organisation and the environment.
Definition
An energy management scheme provides a systematic and continuous method of assessing,

improving and evaluating an organisation's energy usage.
Advantages of an energy management scheme
An effective energy management scheme:
* saves money
* conveys an `environmentally friendly' attitude
* often makes for greater employee workplace comfort.
Disadvantages of an energy management scheme
There are no real disadvantages to introducing an energy management scheme, but remember that
it takes time and can require initial expenditure to accrue long-term savings or environmental
benefits.
Action checklist
1. Designate an Energy Management Committee
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The members of the Energy Management Committee should be drawn from all levels of the
organisation. Members from the finance and purchasing departments should be included, together
with the transport manager where applicable. The Committee will manage the assessment,
improvement and evaluation of energy usage. Appoint a coordinator (someone with project
management experience who commands respect and can get things done) to oversee the scheme. If
expertise or resources available are limited consider calling in an energy management consultant.
2. Define the scope and coverage of the scheme
Depending on the size of the organization it is advisable to concentrate on one building or site
initially; the experiences from this can then be used to improve energy efficiency throughout the
rest of the organization. It may also be decided to look at only one type of energy usage, for
example, heating or use of company vehicles.
3. Gather information
Ask the committee's finance department representative to produce a report of all the energy bills
over the last couple of years. Check the tariffs being paid. Do they look sensible, or too high?
Look for variations in consumption over the year. Ask an alternative provider if they can quote
using your own consumption data. Consider a single supplier for both gas and electricity which
may provide further savings.
Contact the local Energy Efficiency Office to ascertain whether any grants are available for your
organization. The Office should also be able to provide figures giving best practice energy usage
which can be compared with those of your organization. If possible, try to compare your
organization’s energy usage figures with those of another organization.
4. Undertake an energy audit
This involves an examination of the organisation to highlight energy wastage. Checklists should be
produced covering different areas.
Areas to cover and points to look for include:
* Transport
- Are vehicles properly serviced, maintained and tuned?
- Do employees share vehicles when they are travelling to the same place on business?
- Do some drivers appear to use too much fuel? Do they need advice on fuel economy?
- Is the most cost-effective form of transport used?
- Can diesel or lpg be used instead of petrol?
* Lighting
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- Are the most efficient light bulbs being used?
- Could more use be made of daylight by moving workstations nearer windows?
- Are lights switched off when rooms are not in use?
- Are windows cleaned regularly?
* Heating
- Is the heating system serviced regularly?
- Are thermostats functioning correctly and are they set to the correct temperature?
- Is the heating switched off or turned down when the building is empty?
- Are windows double glazed?
* Air conditioning
- Is there really a need for it?
- Is the system kept clean and regularly maintained?
- Is it working against the heating system?
* Insulation
- Are the wall and roof insulation materials of the correct type and thickness?
* Ventilation
- Do employees open doors or windows to cool the place down rather than turning down
thermostats?
- Are there excessive draughts from badly fitting doors and windows?
* Equipment / machinery
- Is machinery running efficiently?
- Could any heat / energy produced by processes be re-used?
- Is the right size of machine used for each job?
- Are computers and machines turned off when not in use?
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Every member of the Committee should be involved in the preparation and carrying out of the
survey. It can be split by department or site, or each member can look at one particular aspect of
energy use.
5. Analyse the results and make improvements / modifications
The results of the survey should highlight areas where action can be taken immediately (for
example turning down thermostats) and areas where investment may be needed to produce long-
term gains (for example a more efficient boiler system). Ensure that the purchasing department
takes energy efficiency into account when making acquisitions by asking suppliers about the
energy consumption of any machinery or equipment to be purchased. Ask the department to look
for more energy-efficient machines that could replace the present ones cost-effectively, and new
innovations such as systems that switch off lights automatically unless deliberately reactivated.
6. Communicate and train staff
Communicate the benefits of reduced costs through improved energy management to all
employees. Provide training on ways in which workers can reduce energy usage, for example, by
not opening windows to cool down an office but turning the heating down. The checklists used to
undertake the energy audit will help with this. Ask suppliers to provide training on the best ways
to maintain and service specialist equipment. Reward staff who suggest successful ways in which
energy usage can be reduced.
7. Evaluate the changes and look for further improvements
Check the energy bills after the scheme has been implemented and record any reductions.
Communicate successes to all employees. Hold regular meetings of the Energy Management
Committee to look for further ways in which energy usage can be reduced.
Dos and don'ts for an energy management scheme
Do
* Make maintenance and servicing a regular process.
* Let all staff know of the importance of reducing energy usage.
* Ensure purchasing staff look at energy efficiency before making an acquisition.
Don't
* Forget to record the amount spent on energy before the scheme is implemented.
* Hide the results of the scheme--inform all staff of its success.
* Stop after one audit and set of responses--continually look for improvements.
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Related checklists
* Taking action on the environment
* Setting up a suggestion scheme
Thought starters
* Are lights switched off when a room is left empty?
* Are all the radiators functioning correctly?
* Does your company car use too much petrol?
* Turning the heating down one degree saves fuel.
Checklists are available in the following formats:
* Individual checklists.
* A complete set of 175 on CD-ROM or in hard copy.
* Checklists with permission to photocopy.
Planning for an Effective Energy Management Program
The headline in the local newspaper caught my eye - "Lower energy use leaves experts pleased but
puzzled." The article stated that "Although the data are preliminary, experts are baffled that the
country appears to have broken the decades-old link between economic growth and energy
consumption."
For those of us who have been involved in energy management for many years, this article
contained no news. We have seen, in the last few years, companies becoming more efficient in
their use of energy, which shows in the data. Companies that have exacted all possible savings
from downsizing are looking for new ways to become more competitive. Better management of
energy is a viable way to cut costs, so more companies are establishing energy management
programs.
With the new technologies and alternative energy sources now available, this country could
possibly reduce its energy consumption by 50%-if there were no barriers to implementation. But
of course, there are barriers, mostly economic. Therefore, we might conclude that managing
energy is not just a technical challenge, but one of how to best implement those technical changes
within economic limits, with a minimum of disruption.
Unlike other management fads, such as value analysis and quality circles, that have come and
gone, energy management will have a long-lasting place in business.
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There are several reasons for this:

There is direct economic return
Most manufacturing companies are looking for a competitive edge
Energy technology is changing rapidly; state-of-the-art techniques have half lives of 10 years at
the most
Energy management includes energy security
Facilities managers who choose-or are drafted-to manage energy will do well to recognize this continuing
need and exert the extra effort to become skilled in this emerging and dynamic profession.
Energy Manager
Management support is very important to the success of an energy management program. Even
more important is the selection of an energy manager who can secure this support. The energy
manager should have a vision of what managing energy can do for the business. Every successful
program has a mover and shaker who makes things happen. The energy program is built around
this person.
Some energy managers take on too much of the burden, trying to be energy engineers as well as
energy managers. Although individuals working alone can accomplish much, for the long haul,
programs that involve everyone at a facility are much more productive and permanent. Developing
a working organizational structure may be the most important thing an energy manager does.
The Energy Policy Act of 1992 (EPACT) changed the role and qualifications of the energy
manager. For instance, EPACT requires certification of federal energy managers, deregulation of
the electric utility industry, and performance contracting, which adds business acumen to the job
qualifications for energy managers.
following requirements for an energy manager:
Set up an energy management plan
Establish energy records
Identify outside assistance
Assess future energy needs
Identify financing sources
Make energy recommendations
Implement recommendations
Provide liaison for the energy committee
Plan communication strategies
Evaluate program effectiveness
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Energy management programs can, and do, originate within a single division of a large
corporation. The division, by example and savings, causes people at the corporate level to imitate
the program. Other times corporate personnel initiate programs. These corporate people have
facilities responsibility and have implemented good corporate facilities programs. They see the
importance and potential of an energy management program and take a leadership role in
implementing one. In every case observed by the author, good programs have been initiated by
one individual who has recognized the potential, put forth extra effort, taken the risk of pushing
new concepts, and seemed to have a higher calling to save energy.
Corporate Programs
When a program is initiated at the corporate level, there are some advantages:
More resources are available to implement the program, such as budget, staff, and facilities
Top management support can be used to get management support at lower levels
The existence of expertise throughout the corporation is better known and can be made
available to division energy managers
Expensive test equipment can be purchased and maintained at corporate level for use by
other entities as needed
A unified reporting system can be put in place
Creative financing may be the most needed and the most important assistance to be
provided from corporate level
Corporate personnel can best determine the affects of energy and environmental legislation
Corporate personnel can best evaluate electrical utility rates and structures, as well as the
effects of unbundling of electric utilities
However, corporate-level energy managers must be aware that some divisions may have already
done a good job of saving energy. Division personnel may worry about corporate-level staff taking
credit for their work. Also, all divisions don't progress at the same speed. Work with those who are
most interested first, then give them credit to top management. Others divisions will then request
assistance.
Energy Team
The energy team is the core of the program. The main criterion for membership should be interest.
Administration groups, such as accounting or purchasing, facilities and maintenance, and each
major department should be represented.
Team members should be appointed for a specific time period, such as one year. Annual
membership rotation can allow new people with new ideas to participate, provides a mechanism
for tactfully removing non-performers, and involves greater numbers of people in the program in a
meaningful way.
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Team members should be selected to supplement skills the energy manager lacks; it is unrealistic
to think one energy manager can have all the skills. The team, however, must:
Have enough technical knowledge to understand the technology used by the organization,
or be trained in that technology
Have a knowledge of potential new energy-saving technologies
Have planning skills that will help establish the organizational structure, plan energy
surveys, determine educational needs, and develop a strategic energy management plan
Understand the economic evaluation system used by the organization, particularly payback
and life-cycle cost analysis
Have good communication and motivational, skills since energy management involves
everyone within the organization
The strengths of each team member should be evaluated using the skill list above and their
assignments made accordingly.
Employees
Employees are perhaps the greatest untapped resource in an energy management program. A
structured method of soliciting their ideas for more efficient use of energy can prove to be the
most productive effort of the energy management program. A good energy manager will spend
20% of the year working with employees. Too many times employee involvement is limited to
posters that say "Save Energy." Employees in manufacturing plants generally know more about
the equipment than anyone else in the facility because they operate it. They know how to make it
run more efficiently, but because there is no procedure in place for them to have any input, their
ideas go unsolicited.
An understanding of the psychology of motivation is necessary before an employee involvement
program can be successfully conducted. Motivation may be defined as the amount of physical and
mental energy that a worker is willing to invest in a job. Three key motivation factors are listed:
Motivation is already within people. The task of the supervisor is not to provide
motivation, but to know how to release it.
The amount of energy and enthusiasm people are willing to invest in their work varies with
the individual. Not all are overachievers, but not all are lazy either.
The amount of personal satisfaction derived from a task determines the amount of energy
an employee will invest in the job. Achieving personal satisfaction has been the subject of
much research by industrial psychologists, and they have emerged with some revealing
facts. For example, they have learned that most actions taken by people are done to satisfy
a physical need, such as the need for food, or an emotional need, such as the need for
acceptance, recognition, or achievement. Research has also shown that many efforts to
motivate employees deal almost exclusively with trying to satisfy physical needs, such as
raises, bonuses, or fringe benefits. These methods are effective only for the short term, so
we must look beyond these to other needs that may be sources of releasing motivation,
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A study done by Heresy and Blanchard in 1977 asked workers to rank job-related factors
listed below. The results:
1. Full appreciation for work done
2. Feeling "in" on things
3. Understanding of personal problems
4. Job security
5. Good wages
6. Interesting work
7. Promoting within the company and growth
8. Management loyalty to workers
9. Good working conditions
10. Tactful discipline of workers
This priority list will no doubt need to be changed over time and customized for individual
companies, but the rankings of what supervisors thought employees wanted were almost
diametrically opposed. They ranked good wages first.
Knowing that job enrichment is a key to motivation, the energy manager can involve employees in
a program by providing some simple and inexpensive recognition.
suggestions will improve significantly with training. Educational training should be considered for
management, the energy team, and employees.
Management Training
Subtle ways must be developed to get them up to speed. Getting time on a regular meeting to
provide updates on the program is one way. After the momentum of the program gets going, it
may be advantageous to have a half- or one-day presentation for management.
A periodical, concise report can be a tool to educate management. Short articles that are pertinent
to the educational goals, taken from magazines and newspapers, can be attached to reports and
sent selectively. Having management be a part of a training program for either the energy team or
employees, or both, can be an educational experience, since we learn best when we have to make a
presentation.
Energy Team Training
Since the energy team is the core Educational Planning
A major part of the energy manager's job is to provide energy education for the organization. After
two decades of effort, ignorance concerning energy remains a big problem.
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Raising the energy education level throughout the organization can have big dividends. An energy
program will operate much more effectively if management understands the complexities of
energy, and particularly the potential for an economic benefit. The coordinators will be more
effective when they are able to prioritize energy conservation measures and are aware of the latest
technology. Finally, the quality and quantity of employee group of the energy management
program, proper and thorough training for them should have the highest priority. Training is
available from many sources and in many forms.
Self study-requires a good library of energy-related materials for coordinators
In-house training-may be done by a qualified member of the team or an outside consultant
Short courses offered by associations such as the Association of Energy Engineers, by
individual consultants, by corporations, and by colleges and universities
Comprehensive courses of one to four weeks duration offered by universities, such the one
at the University of Wisconsin, and the one being run cooperatively by Virginia Tech and
North Carolina State.
For large decentralized organizations with ten or more regional energy managers, an annual two-
or three-day seminar can be the base for the educational program. Such a program should be
planned carefully. The following suggestions should be incorporated into such a program:
Select quality speakers from inside and outside the organization.
Invite a top-level executive from the organization to give opening remarks. It may be wise
to offer to write the remarks, or at least to provide some material for inclusion.
Involve the participants in workshop activities so they can provide input to the program.
Also, provide some practical tips on energy savings that they might go back and implement
immediately. One or two good ideas can pay for their time in the seminar.
Make the seminar first class with professional speakers, a banquet with an entertaining
after-dinner speaker, and a manual that includes a schedule of events, sketches of speakers,
list of attendees, and information on each topic presented. Vendors may contribute door
prizes. You may wish to develop a logo for the program, and include it on small favors
such as cups, carrying cases, etc.
Employee Training
A systematic approach for involving employees should start with some basic training in energy.
This will help them develop better ideas. Employees value training, so morale may also improve.
Simply teaching the difference between electrical demand and kilowatt-hours of energy, and that
compressed air is very expensive is a good beginning. Short training sessions on energy can be
made part of other training for employees. A more comprehensive training program should
include:
Energy conservation in the home
Fundamentals of electrical energy
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Fundamentals of energy systems

How energy surveys are conducted and what to look for
Audit Planning
With the maturing of performance contracting, energy managers have two choices for the energy
audit process. They can go through the contracting process to select and define the work of a
performance contractor, or they can set up their own team and conduct audits. A corporate energy
manager may order performance contracting at one facility and energy auditing at another.
Performance contracting requires no investment other than that involved in the contracting process
(which can be very time consuming). Just the energy manager and financial personnel are
involved.
However, there are disadvantages:
Technical resources are generally limited to the contracting organization
Performance contracting is still maturing, and many firms underestimate the work required
The contractor may not have all the skills needed
The contractor may not have an interest in low-cost or no-cost projects
The audit team approach also has risks. Financing identified projects becomes a separate issue for
the energy manager, and a well-organized energy management structure is needed to take full
advantage of the work of the audit team.
Audit teams, however, can be selected to match equipment to be audited and can be made up of in-
house personnel, outside specialists, or best, a combination of both.
They can identify all low-cost and no-cost energy conservation projects, as well as projects
requiring large capital investments. The audit often serves as an excellent training tool because
other personnel become part of the process. Sometimes a training component can be added to the
audit process.
Ownership
The key to a successful energy management program can be described using one word-ownership.
Program ownership must extend to everyone within the organization. Employees who operate a
machine "own" that machine. Any attempt to modify their "baby" without their participation will
not succeed. Members of the energy team are not going to be interested in seeing one person-the
energy manager-get all the fame and glory for their efforts. Managers who invest in energy
projects want to share in the recognition for their risk taking. A corporate energy team that goes
into a division for an energy audit must help put a person from the division in the energy
management position and then make sure the audit belongs to the division. Ownership is the most
important key, but below are some others.
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Tips for Success

In observing successful energy management programs, the following tips for success have been
compiled:
Have a plan that deals with organization, surveys, training, and strategic planning that has
scheduled events. Advantages include avoiding disruptions by non-productive ideas, and
setting up scheduled events that keep the program active.
Give away-or at least share-ideas for saving energy. The surest way to kill a project is to be
possessive. If others have a vested interest they will help make it work.
Be aggressive. The energy team-after some training-will be the most energy
knowledgeable group within the company. Too many management decisions are made with
a meager knowledge of the effects on energy management.
Use proven technology. Many programs get bogged down trying to make a new technology
work and lose sight of the easy projects with good payback. Don't buy serial number one.
Price breaks and promises of support will not overcome the problems of beta testing a
solution.
Go with the winners. Not every department within a company will be enthused about the
energy program. Make enthusiasts look good through the reporting system to top
management and others will follow.
A final major tip-ask the machine operators what should be done to reduce energy use.
Then make sure they get proper recognition for ideas.
Energy Saving Tips

Replace Light Bulbs
Unplug Electronics
Save Water
Adjust Your Thermostat
Buy Energy Efficient Appliances.
Adjust Your Water Heater.
Keep Cool With Ceiling Fans
Be Smart About Lighting
Power Down Your Computer.
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Wash Clothes in Cold Water

Load Up Your Dishwasher
Maintain Your Clothes Dryer
Find and Seal Leaks
Good Investment Recommendations

Programmable Thermostat.
Seal Your Ducts
Seal Your Home
Insulate, Insulate, Insulate
Upgrade Your Heating System.
Maintain Your Cooling System
Windows
Electrical end use in industries
Chile consumed 22,362 gigawatt-hours (GWh) of electricity in 1992 (see Figure 1). Fifty-nine
percent of this is consumed by the industrial sector. The commercial, public and residential sectors
together consume 30 percent of the country's electricity. Residential consumption is estimated to
be twice that of commercial. Transmission and distribution losses are also significant at 14
percent.
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FIGURE 1: ELECTRICITY CONSUMPTION BY SECTOR, 1993
Motors and lighting are the two largest end-uses in Chile.25 Motors consume an estimated 61
percent of Chile's electricity while lighting takes up 18 percent.
FIGURE 2: ELECTRICITY END USES IN THE INDUSTRIAL SECTOR
Over the last decade, electricity use by the Chilean industrial sector increased by more than 30
percent.28 Overall industrial energy intensity has increased by 5 percent during the same time
period. The National Energy Commission (CNE) attributes higher energy intensity to increased
mechanization, fuel switching and changes in the productivity of industry. The CNE considers this
increase in energy intensity to be an indication that there is an urgent need for significant
improvement in the industrial sector's energy efficiency. The CNE concludes that a targeted
industrial efficiency policy would reduce the alarming increase in energy intensity in industry.29
Industrial Sector Efficiency Potential: Two Case Studies
The following are two case studies of energy efficiency potential in Chile's copper and textile
industries. Corporación del Cobre (Codelco) The Corporación del Cobre (Codelco) is Chile's
publicly-owned copper company and the country's industrial giant. In 1990 it had sales of US$3.2
billion, investment projects of US$330 million and 37,000 employees. Just one Codelco mine
spends US$50 million on energy each year. Over the next 4 years, Codelco plans five new
infrastructure projects worth nearly US$2 billion.
Codelco faces a number of challenges that are relevant to energy efficiency:

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The increasing depth of its mines requires more energy consumption. Codelco is responding by
increasing the use of controls and mechanization to reduce energy costs. More stringent
regulations under Chile's new environmental law will cost Codelco an estimated US$2 billion.31
Codelco is seeking the lowest cost way to reduce its air and water emissions. Increasing
competition in the national and international copper market is forcing the company to maintain and
increase the quality of its copper while staying competitive. Codelco views modernization of its
operations as a way to simultaneously increase product quality and capital productivity.
Divisions within Codelco have begun to respond to these pressures by improving the energy
efficiency of the mining and production processes. As a first step, Codelco evaluated the energy
efficiency potential in motors and transformers in its Chuquicamata mine, the world's largest open
pit copper mine. The study found that motors consume 95 percent of the mine's electricity. One
phase of the copper mining process, the concentrator, consumes almost half of the mine's
electricity. Installation of energy-efficient motors would reduce the mine's annual electricity
consumption by 55 GWh, saving US$3 million per year in electricity costs.32
Large industries in Chile, including Codelco, are becoming interested in the concept of energy
services companies. IIEC and the University of Chile have a contract with Codelco to introduce
energy efficiency criteria to the company's management. The project will also investigate the
feasibility of a division-wide policy of life-cycle costing for all energy-using equipment.
The Textile Industry
There are approximately 4,500 companies in Chile's textile industry, representing 18 percent of
Chile's 25,000 companies. Like most Chilean industries, textile manufacturers use out-dated and
inefficient technology. The fabrication of fiber, thread and material is the most energy-intensive
process in the textile industry, accounting for an average 15 percent of total production costs. A
study of the potential for energy savings in the textile industry suggests that minimal energy
efficiency investments could realize significant energy savings and a return on investment within
one year.33 Principal opportunities for energy savings exist in the generation of steam vapor.
Insulation of valves and tubes, reduction of the evaporation from cleaning machines and the
introduction of controls would greatly enhance the efficiency of the manufacturing process.
The Commercial and Residential Sectors
Chile's construction industry experienced a boom in the early 1990s driven by residential high-rise
and commercial buildings. The boom slowed in 1994 as construction of residential buildings
declined, although new commercial buildings continue to spring up around Santiago.34 The
industry expects the building sector to continue to enjoy strong growth.
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Construction activity varies from region to region. Small- and medium-sized cities outside the
Santiago area are growing rapidly. The city of Temuco, for example, is one of the fastest growing
cities in all of Latin America.
Together, the commercial, residential and public sectors account for 30 percent of electricity
consumption in Chile.
FIGURE 3: ESTIMATED END USE ELECTRICITY CONSUMPTION
IN THE RESIDENTIAL AND COMMERCIAL SECTORS
Lighting is an important end-use in both residential and commercial buildings, representing 30

percent and 50 percent of total consumption respectively. Refrigeration is also a significant
residential end-use.36
Potential for Energy Efficiency in the Commercial and Residential Sectors
Residential and commercial customers pay as much as US$0.11 per kWh for electricity. In a
country with a climate like that of northern California, these rates make investments in energy
efficiency very compelling. Chile's climate varies widely from the north to the south. However,
Santiago's climate is similar to that of San Francisco. The south is generally 5 to 10 degrees colder
than Santiago and the north is 5 to 10 degrees warmer. Studies suggest that two-thirds of energy
losses in the building sector are through poor building design and inefficient appliances.
Investment in insulation in Santiago's buildings would pay for itself after one winter season. In the
colder climate of Punta Arenas in the far south, such an investment would take only two weeks to
pay back.37
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The barriers to energy efficiency in Chile are similar to those in other developing countries,
namely:
Consumers lack knowledge about the life-cycle cost of standard versus efficient technologies and
are not familiar with energy-efficient products.
There are no building or energy performance standards in Chile.
Many energy-efficient products, such as electronic ballasts and superior lighting controls, are not
widely available in Chile.
Building contractors and architectural and engineering firms are not familiar with the basic
techniques and materials which could improve the energy efficiency of the building envelope and
mechanical systems.
Energy-efficient technologies are not yet integrated into building design. However, the
construction industry has begun to include heating, ventilating and air conditioning (HVAC)
systems in urban residential and commercial buildings. This building innovation has created
significant opportunities for building energy management systems. Until only a few years ago,
new thermostat systems in Chile were quite primitive. The growing sophistication of the
architecture and construction industries and the presence of large multinational companies like
Honeywell and Johnson Controls have expanded the market for energy management systems and
the variety of products available.
Significant advertising and marketing efforts by companies like Philips have also increased the
installation of some energy-efficient technologies, such as compact fluorescent lamps, in
apartment and office buildings.
The widespread use of energy-efficient products would significantly reduce the life-cycle cost of
operating buildings in Chile and increase the comfort of building occupants.
Status of Building Codes and Ordinances
Building codes that govern energy performance do not exist in Chile. However, the success of
Chile's municipal housing design project may compel the Ministry of Housing to develop an
energy performance code. In the meantime, a team of Chilean building design experts and policy
makers is convening a panel with counterparts from Brazil, Argentina, Peru and Uruguay to form a
regional building code.
Current building ordinances categorize buildings based on their purpose (single family, high-rise
apartments, row houses, etc.) and on the "quality" of materials used in construction. It is not clear
how the Housing Ministry arrived at these categorizations but it is certain that energy efficiency
was not a factor. For example, houses designed with aluminum windows are considered higher
quality than a house with wood windows, even though wood windows are usually more energy-
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efficient than aluminum. Chile's municipal energy efficiency programs and current efforts to
develop regional building codes may force a reevaluation of these ordinances.
There have so far been very few energy efficiency projects in the commercial and residential
sectors. The most successful project to date improved the level of insulation in new houses and
buildings. The following is a description of that project.
Home and Building Insulation in La Florida
Most houses and buildings in Chile are not insulated. To help change this situation, the University
of Chile joined with insulation manufacturers and an architect to encourage the installation of
insulation in new homes and buildings. The project was situated in La Florida, a municipality near
Santiago.
As part of the project, the municipality of La Florida reduced building permit fees for architects
and builders who specified thermal insulation for new buildings. The municipality prorated the
reduction in fees based on the thermal efficiency factor of the design (G Factor). Between 1991
and 1993, the project resulted in the insulation of 1,491 buildings, mostly private homes, with a
total area of 100,000 square meters (1,000,000 square feet).38 The project's success has motivated
at least three other regions in Chile to adapt the model for implementation in their own
municipalities.
The Public and Municipal Sector
FIGURE 4: END USE ELECTRICITY CONSUMPTION IN THE PUBLIC/MUNICIPAL

SECTOR
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Chile's municipalities have led the country in implementation of several energy efficiency projects,
including the above-mentioned insulation project and the following highly successful streetlighting
retrofit project.
Energy-Efficient Streetlighting
Chile's municipal streetlighting project was developed by the National Energy Commission (CNE)
to raise awareness of energy and electricity costs among municipalities.
The pilot project took place in the northern city of Antofagasta. The municipality replaced over
7,000 streetlights in the city with energy efficient streetlights at a cost of US$675,000. The CNE
forecast monthly savings of US$25,000 from reduced electricity consumption but this forecast did
not consider reduced maintenance costs. The new lights required no maintenance for two years.
Instead of taking 27 months to pay back the initial investment, the Antofagasta project took only
17 months.
In addition, the project had the following economic and environmental benefits:
Net monthly savings of US$25,000 in electricity costs.
Reduced maintenance costs.
Development and use of an innovative financing mechanism.
Annual reduction of 1,500 tons of CO2 from thermal electricity generation.
FIGURE 5: STREETLIGHTING PROJECT SUMMARY
As of January 1994, 150 municipalities around the country were implementing similar street
lighting projects. At the national level, these projects could yield several additional benefits:
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Distribution utilities have become involved in street lighting retrofits by providing financing to
municipalities. The municipalities repay the distribution companies on their monthly electricity
bill from energy savings. Half the municipalities implementing street lighting projects around
Chile have arranged for financing through their local utility while the other half have opted for
leasing arrangements with private companies.
Between 1991 and 1994, the increased demand for luminaries from the municipalities led to a
reduction in price from US$130 to $100 per luminaries.
Municipal awareness of energy consumption (and the opportunities to reduce what was once
perceived as a fixed cost) is generating new energy efficiency projects at the municipal level.
Country-wide replication of this project could save US$11 million in annual electricity costs
(amortized over 6 years), equal to the cost of a 33.5 MW central generating facility.
Non-Power Sectors
Although it is not the focus of this study, market opportunities for energy efficiency exist beyond
electricity. Chile is highly dependent on non-renewable resources and imports 90 percent of its
petroleum, mostly for transportation.
Transportation in Santiago
Santiago's automobile fleet is growing rapidly, exacerbating the city's air pollution and congestion
problems, despite the fact that public transportation provides 50 percent of daily trips in the city.
Transportation and its related problems are a policy priority in the capital region and among other
growing cities. Policy makers have already required all new vehicles to be equipped with catalytic
converters. Non-catalytic automobiles are restricted from circulation in the Santiago metropolitan
area on certain days of the week during winter and spring. Policy makers are also beginning to
restrict the number of buses that can operate in Santiago's downtown. Private bus owners must
now bid on downtown bus routes in order to operate along them.
Policy makers, transportation professionals and citizens of the city agree that more political and
technical measures must be implemented in order to avert further deterioration of Santiago's
transport system. There are several factors that contribute to a potential market for economically-
viable alternative transportation technologies:
Political commitment to address transportation problems in Chile;
Availability of natural gas by 1997;
Strong technical transportation planning and engineering capability;
Political and consumer concerns about the impact of air pollution on city residents;
Existence of an air quality monitoring system;

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Dependence on imported oil (90 percent) exacerbated by sharply increasing fuel consumption; and
Growing consensus that increased investment in urban road infrastructure will not address Chile's
transport problems.
In the long term, possible opportunities for investment in alternative transport technologies are:
Natural gas vehicle conversion for taxis and buses (Buenos Aires has already converted their fleet
of taxis);
Electric vehicles, which have captured the interest of at least one distribution utility; and
Advanced traffic signalization and controls systems.
US firms with proven transport innovations that combat congestion and air contamination face an
open market and welcome political support in Santiago and other large Chilean cities. IIEC's Latin
American office in Santiago is the best initial contact for transport firms interested in the Chilean
market over the medium- to long-term.
Solar cookers and hot water heaters
The northern region of Chile offers favorable conditions for the use of solar energy, including
solar hot water heating for homes and hospitals and generation of electricity for industry. Chilean
consumers use several times more fuelwood than other developing countries, primarily for water
heating and cooking. Installation of solar cookers and hot water heaters could significantly reduce
the environmental and economic costs of fuelwood consumption. According to the National
Energy Commission, the cost of installed hot water heaters is roughly US$500 per square meter
and that of solar cookers is US$100 per square meter.
Wood Stoves
Santiago requires new wood stoves to comply with Oregon State and US Environmental
Protection Agency regulations. As a result, all wood stoves sold in Santiago are high-efficiency
models. There is currently only one manufacturer of high-efficiency wood stoves supplying this
market. The stoves are expensive and sold in a niche market catering to higher income residents of
the city. There is room for foreign suppliers in this market.
Energy Conservation in Metal Finishing Operations
In Minnesota, fabricated metal operations are the second largest consumer of industrial electrical
energy and metal finishing was the sixth largest segment identified for fabrication electrical
consumption. Metal fabrication was also the third largest industrial consumer of natural gas with
metal finishing constituting the largest portion of this consumption accounting for about one third
of it. According to MnTAP’s Energy Conservation Market Analysis, the plating, polishing, and
finishing sub-sector accounts for approximately 32% of the total gas use of fabricated metal
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operations in Minnesota. The analysis also identified that this sub-sector offers the most potential
natural gas savings. The electrical use of the plating, polishing, and finishing sub-sector has the
potential for nearly 18% estimated savings. There are many opportunities available to reduce gas
and electrical consumption in in your metal finishing facility.
The Energy Center in Wisconsin published information on energy use in the metal finishing
industry and related conservation opportunities in two volumes:
Metal Finishers Guide to Reducing Energy Costs [PDF 192KB]. This guide provides step-by-step
instructions on how to improve the efficiency and reduce the costs of metal finishing. It offers an
Action Step Checklist to help you organize and track the actions you take in your facility.
Metal Finishers Technical Supplement [PDF 377KB]. This reference provides technical
information to support the energy-saving techniques, or actions, described in the Energy Center of
Wisconsin’s Metal Finisher’s Guide to Reducing Energy Costs.
The chart to the right shows the percentage electrical end-use by metal finishing processes as
identified in an American Electroplaters and Surface Finishers (AESF) study. "Secondary
Processes" includes process heating, compressed air, waste treatment, and polishing. "Building
and Other" includes lighting, air conditioning, and other uses.
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On the electrical side, process power (rectifiers) and ventilation are the largest portions of energy
consumption, followed by lighting, pumps, and motors. The following are opportunities to
increase energy efficiency through energy improvements.
Power supply improvements
High energy use in rectifiers is typically due to heat loss. Check all joints in the rectifier for hot
spots caused by resistance and heat generation and clean those joints. Other resistance losses may
be caused by corrosion within the rectifier, the use of undersized conductors, or excessive distance
between the rectifier and the tank. Choose a rectifier that is water-cooled or convection-cooled
instead of fan-cooled. Fan-cooled rectifiers use additional energy to operate the fan and have a
higher potential for corrosion from the air input. Convection-cooled rectifiers remove heat without
a fan. Although the initial cost of water-cooled rectifiers is greater, they provide the greatest
efficiency. Energy is not wasted on operating a fan and the heated water can be reused in your
facility.
There are opportunities to minimize losses in your electrical power supply systems. If electrical
conductors are undersized or their connections have air or corrosion gaps in them, some of the
electricity is converted to heat and lost. In AC to DC power rectifiers, if the conversion process is
not proceeding correctly they produce less DC electricity and more heat. The following new
design and maintenance practices minimize these losses:
Have a thermal imaging inspection performed to identify high-temperature electrical conductors

and electrical connections. Repair poor connections and upgrade undersized conductors.
Have measurements taken to determine the actual electrical transformation efficiency of your
existing rectifiers.
After identifying current replacement options, efficiency, and cost, evaluate the financial return for
replacing rectifiers with more efficient models.
Conduct routine maintenance to insure existing rectifiers operate efficiently and operating
temperatures are minimized.
Ventilation improvements
Ventilation is a high user of energy in metal finishing facilities. There are costs associated with
operating fans, supplying energy to make-up air, and treating exhaust air. Ventilation is important
in avoiding corrosive fumes that deteriorate the facility and equipment.
Opportunities are available to improve your ventilation system. Energy may be conserved through
recovering exhaust. High volumes of air are exhausted; if recovered and transferred to the make-
up, it can reduce the energy needed to condition make-up air.
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The Energy Center in Wisconsin provides the following list to optimize your existing plant
ventilation system:
Create a list of all ventilated workstations.
For each workstation determine the ventilation requirement according to regulations and your
facility’s standards.
For each ventilation point have the actual ventilation rate measured by a qualified ventilation
service company.
For each ventilation point determine required ventilation rate from the American National
Standards Institute (ANSI) standards (see your local contractor or the technical supplement to this
guide).
Pursue these actions as appropriate:
To reduce the amount of ventilation needed: cover idle tanks, improve hood and baffle designs,
and identify mist suppressant options. Hire a firm that specializes in this if you do not have the
expertise available.
If you have identified excessive ventilation reduce exhaust airflows by improving ventilation hood
and baffle design. If airflow reduction is more than 20% of rated ventilation fan capacity, reduce
fan speed and rebalance the system.
You can reduce fan speed by changing pulley wheel sizes in belt-driven systems, installing a
variable-speed drive on direct-drive fans, installing an adjustable speed coupling on direct-drive
systems, and replacing the existing motor with a lower-speed or multiple-speed motor. Replacing
the entire fan/motor assembly is also an option. Remember that whenever you reduce total
ventilation airflow or adjust one or more ventilation hoods, you must rebalance the system.
If ventilation requirements at a workstation vary, then vary the ventilation rate to match the need.
You can shut down the ventilation when unnecessary or vary the ventilation rate to match
changing needs. Use a VSD on the fan instead of a damper.
However, you should also evaluate if an entirely new ventilation system would provide you with
substantial energy savings and if it fits into your capital improvement plans. Installing a new
system, such as a push-pull ventilation system, can reduce the volume of air being moved, saving
both electrical and fuel energy.
Lighting improvements
Lighting improvements can be simple, and have the potential to save on energy costs. Lighting
fixtures should be cleaned and maintained. Lighting systems are often designed to provide more
light than necessary to compensate for dirty reflectors. Increase energy efficiency in your lighting
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systems by reducing over lighting and removing diffusers. Zone lighting systems by installing
lumen maintenance systems and activity sensors so that lights are on only when an area is in use.
Dimmer controls can save energy by allowing the adjustment of light intensity.
The Energy Center in Wisconsin provides the following list to reduce lighting costs by using more
efficiency lighting technologies and reducing unnecessary lighting:
If your fluorescent lights do not have electronic ballasts and T-8 (1 inch diameter or smaller)
bulbs, contact a lighting supplier or consultant to evaluate the economics of replacing your lighting
system with a newer, more efficient system.
Identify periods when lighting remains on when not needed for production or safety. Quantify the
number of fixtures and number of hours of unnecessary lighting. Contact a lighting supplier or
consultant to evaluate the economics of installing automatic switching controls, which can turn
lighting off when an area is unoccupied.
Identify any outdoor lighting that is on during the day and install a photosensor to control this
lighting.
If you have any mercury vapor high bay or outdoor lights, contact a lighting supplier or consultant
to evaluate the economics of installing metal halide fixtures with the same light output.
Compressed air improvements
Compressed air is one of the most expensive uses of energy in a manufacturing plant. About 8hp
of electricity is used to generate 1hp of compressed air. Calculating the cost of compressed air can
help you justify system improvements that increase energy efficiency. Visit MnTAP's Greening
Your Business Compressed Air page for tips for increasing your compressed air system’s
efficiency and decreasing costs.
Fuel End-Use in Metal Finishing Processes
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The chart to the right shows the percentage fuel end-use by metal finishing processes as identified
in an AESF study. "Other" includes ovens and dryers, vapor degreaser heating and stills, waste
recovery evaporators, and other uses.
On the gas side, the largest consumers of fuel are process tank heating, boiler operation, and space
heating.
Low temperature chemistries
Low temperature chemistries can create gas savings for metal finishers. Processing and cleaning
parts using low temperature chemistries mean the tanks need less water heating, and therefore less
natural gas consumption. Additional opportunities exist for metal finishers, including optimizing
plating bath temperatures through added insulation. Process changes, such as using more efficient
rinsing techniques, are often inexpensive compared to purchasing new equipment and may have
greater potential for adoption.
Ventilation improvements through push-pull systems
Incoming air in a push-pull ventilation system is generally near the exhaust rather than being
added to the building, potentially hundreds of feet away. Incoming or push air divides the work of
moving air across a tank and creates an ―air curtain‖ across the tank. Typically, it takes less effort
(smaller volumes and fans) to move air from both sides than it does from a single side. In addition,
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since the make-up air is quickly exhausted and not added to the building as general ventilation, it
does not need to be heated unless it has an adverse effect on the tank’s operation. Since less heat is
needed, natural gas consumption can be reduced.
Ventilation control
Improved ventilation is generally a large capital improvement project that can affect tank locations
and parts movement; it fits best when a line is being re-built. However, lowering the ventilation
rate during down times can reduce gas consumption. To optimize the use of natural gas in the
ventilation system, identify periods when the facility is not processing parts and reduce the fan
speed and ventilation rate. Additionally, using automatic covers, efficient building insulation, and
radiant heating for spot area heating can create pollution prevention and energy savings.
Energy Conservation Resources
A Tank Heat Loss Calculator was developed by MnTAP to estimate the effects of insulating tanks,
substituting low-temperature chemistries, or estimating energy consumption. Contact Karl
DeWahl to learn more or access the calculator.
EPA Report: Energy Trends in Selected Manufacturing Sectors: Metal Finishing [PDF 272KB].
This report assess the opportunities and challenges for environmentally preferable energy
outcomes in the metal finishing industry.
EPA & Concurrent Technologies Corporation: Evaluation of the KCH Services, Inc. Automatic
Covered Tank System for Energy Conservation [PDF 1.85MB]. An EPA pilot, which ended in
2003, verified the performance of commercial-ready metal finishing technologies that are designed
to improve industry performance and achieve cost-effective pollution prevention results. The
automated covered tank system technology is designed for metal finishing energy conservation.
DOE: Metal Coating Industrial Assessment of Burton Metal Finishing, Inc. [PDF 74KB]. The
Industrial Assessment Center at West Virginia University performed an energy assessment at
Burton Metal Finishing, Inc. at Columbus, Ohio. Seven of the 12 recommendations made by the
assessment team were implemented, resulting in the reduction of energy consumption by 1,411
MMBtu per year, and an annual saving of $19,277.
Demand management answers growing electricity needs
The goal of the electricity supply industry is fairly simple: reliable delivery of electricity to
customers. Today, to deliver on that goal, the industry is facing a new imperative: manage an
effective demand management program.
Demand management is one of a number of ways in which suppliers of a resource can meet their
customers’ needs by either shifting or reducing demand peaks. As the demand for electricity is
predicted to grow, the process will enable Australia to meet this energy need.
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Currently, a relatively large percentage (say 15%) of the assets required to deliver electricity to the
consumer are used on a relatively small number of peak days (say 3, or less than 1%). Given
controlled pricing for utilities, and other issues, there will be limits to the amounts that can be
invested in their infrastructure. Thus, if the peak can be kept stable or managed down, that releases
funds for wise investment elsewhere. It also has other positive impacts.
Demand management is accepted by government, business and industry in Australia as an

alternative to developing and building new electricity generation, transmission and distribution
capacity.
It is also recognised that electricity demand needs better management in the areas of peak load,
greenhouse gases and appliance efficiency.
A proven performer internationally for over a decade, demand management addresses the causes
rather than the symptoms of excessive energy needs. Demand management uses a range of
strategies to modify the level and timing of energy demand.
Within the demand management toolkit are energy efficient appliances and buildings, distributed
generation, standby generation, interruptible contracts, improved network efficiency and more
accurate pricing.
For customers, the benefits of this alternative to more generation and network expansion include
lower energy bills, better energy services, the improved utilisation of resources and fewer
environmental costs.
One energy supplier that serves a rapidly growing franchise area is Integral Energy which has
embraced demand management.
―Our demand management program is reducing capital costs, deferring network augmentation and
reducing greenhouse gas emissions. There are also customer benefits as the program improves
customer awareness and education,‖ said Maree Zammit, Manager of Strategic Development.
An example of Integral Energy’s approach is the program in Castle Hill, a bustling commercial
and residential suburb in north western Sydney.
The program is a first in Australia with Integral Energy working with the Sustainable Energy
Development Authority (SEDA) to cut peak load in the area.
―The project involves negotiations with major commercial customers to reduce their demand
through initiatives such as efficient air conditioning upgrades and lighting,‖ says Ms Zammit.
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―Underpinning the program is our recognition that effective demand management requires the
involvement of all participants in the energy value chain.‖
Warren Centre Executive Director is Chairing several sessions and Integral Energy and Origin
Energy will have senior representatives speaking at the forthcoming Australian Energy & Utility
Summit on 21st & 22nd July at the Sydney Convention Centre. Richard Powis, CEO, Integral
Energy and Julian Turecek, Regulatory Affairs at Origin Energy will be joining an excellent line-
up of speakers from Government and industry who will be making presentations on energy market
reform, investment requirements, regulatory changes and key issues in generation, production,
transmission, distribution, and issues for major energy users.
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EXPERIMENT NO :- 5
Date:
AIM : TO STUDY OF ENERGY MANAGEMENT
Definition and Meaning :

Energy management refer to the managing the use of energy and in straight forward way it is just
finding the way to save electrical energy. It means energy management is to find and implement
new and latest technologies and methods to find the answer to the question How we can save
electrical energy or other form of energy. I used electrical energy because it is the most commonly
used energy form. Visit This link to check why we prefer electrical energy over other forms of
energy ?
There Are Two Main Points In Energy Management :
Demand Management
Energy Efficiency Improvement
Demand Management refer to the saving of electricity by controlling or managing the demand of
electricity or electrical energy.
Energy efficiency refer to the quality improvement of the apparatus used in various energy
consumption application. Energy is essential for working of each and every machine and thus the
energy management is essential for each and every field of work.
Energy Management : Significance
Significance refer to the why and what effect is has on affected systems. Significance of energy
management refer to the fact why we need energy management and how it will affect the energy
system. As energy management is saving of electrical energy so it is of great significance specially
in an environment where people are facing energy crisis. More the energy we will save more
energy we will have to spend on our needs. So energy management is significant and is the need of
the hour.
Energy Management : Why We Need This ?
According to law of conservation of energy Energy can neither be created nor be destroyed. It can
only be converted from one form to another. In this situation when we can't produce energy and
we have to spend high capital on conversion of energy from other forms to electrical energy then
we must save electrical energy as much as possible so that we can get energy as we need, when we
need and at what cost we want ? Energy management is the only way to solve our energy related
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problems. If you want more electricity then save electricity from now. I will discuss methods to
save electrical energy in upcoming posts.
The What, Why, and How of Energy Management
This article explains what "energy management" is, why it's important, and how you can use it to
save energy.
We'll start with the "what", and then move on to the "why", and the "how":
What are you looking for?
Are you looking for something in particular? Or do you have a question that you need answering?
What is energy management?
"Energy management" is a term that has a number of meanings, but we're mainly concerned with
the one that relates to saving energy in businesses, public-sector/government organizations, and
homes:
The energy-saving meaning
When it comes to energy saving, energy management is the process of monitoring, controlling,
and conserving energy in a building or organization. Typically this involves the following steps:
Metering your energy consumption and collecting the data. Finding opportunities to save energy,
and estimating how much energy each opportunity could save. You would typically analyze your
meter data to find and quantify routine energy waste, and you might also investigate the energy
savings that you could make by replacing equipment (e.g. lighting) or by upgrading your
building's insulation. Taking action to target the opportunities to save energy (i.e. tackling the
routine waste and replacing or upgrading the inefficient equipment). Typically you'd start with the
best opportunities first. Tracking your progress by analyzing your meter data to see how well your
energy-saving efforts have worked.
To confuse matters, many people use "energy management" to refer specifically to those energy-
saving efforts that focus on making better use of existing buildings and equipment. Strictly
speaking, this limits things to the behavioural aspects of energy saving (i.e. encouraging people to
use less energy by raising energy awareness), although the use of cheap control equipment such as
timer switches is often included in the definition as well.
The above four-step process applies either way - it's entirely up to you whether you consider
energy-saving measures that involve buying new equipment or upgrading building fabric.Other
meanings
Photo by Valerie Everett
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It's not just about saving energy in buildings - the term "energy management" is also used in other
fields:
It's something that energy suppliers (or utility companies) do to ensure that their power stations
and renewable energy sources generate enough energy to meet demand (the amount of energy that
their customers need).
It's used to refer to techniques for managing and controlling one's own levels of personal energy.
We're far from qualified to say anything more about this!
It also has relevance in aviation – it's a skill that aircraft pilots learn in some shape or form. We
know nothing about aircraft energy management, but we can at least manage a picture of a man on
a plane...
Anyway, from now on we will pay no more attention to these other definitions - all further
references to "energy management" will be to the energy-saving sort described above.
Home energy management
Whilst energy management has been popular in larger buildings for a long time, it has only
recently started catching on in homes. Most homeowners aren't even aware of the term, and take
more of a haphazard, flying-blind approach to reducing their energy consumption...
But the monitoring- and results-driven approach used by professional energy managers is just as
effective in the home as it is in larger buildings.
So, if you're a homeowner looking to save energy, don't be put off by the fact that this article
focuses more on non-residential buildings. Most of the principles that apply to businesses and
other organizations are also applicable to homes. Certainly the four-step process introduced above
and detailed below is entirely applicable to home energy management.
Why is it important?
Energy management is the key to saving energy in your organization. Much of the importance of
energy saving stems from the global need to save energy - this global need affects energy prices,
emissions targets, and legislation, all of which lead to several compelling reasons why you should
save energy at your organization specifically.
The global need to save energy
If it wasn't for the global need to save energy, the term "energy management" might never have
even been coined... Globally we need to save energy in order to:
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Reduce the damage that we're doing to our planet, Earth. As a human race we would probably find
things rather difficult without the Earth, so it makes good sense to try to make it last. Reduce our
dependence on the fossil fuels that are becoming increasingly limited in supply.
Photo by Kevin Dooley
Wind turbines can only do so much - we humans use a lot of energy!
Controlling and reducing energy consumption at your organization
Energy management is the means to controlling and reducing your organization's energy
consumption... And controlling and reducing your organization's energy consumption is important
because it enables you to:
Reduce costs – This is becoming increasingly important as energy costs rise.
Reduce carbon emissions and the environmental damage that they cause - as well as the cost-
related implications of carbon taxes and the like, your organization may be keen to reduce its
carbon footprint to promote a green, sustainable image. Not least because promoting such an
image is often good for the bottom line.
Reduce risk – The more energy you consume, the greater the risk that energy price increases or
supply shortages could seriously affect your profitability, or even make it impossible for your
business/organization to continue. With energy management you can reduce this risk by reducing
your demand for energy and by controlling it so as to make it more predictable.
On top of these reasons, it's quite likely that you have some rather aggressive energy-consumption-
reduction targets that you're supposed to be meeting at some worrying point in the near future...
Your understanding of effective energy management will hopefully be the secret weapon that will
enable you to meet those aggressive targets.
How best to manage your energy consumption?
We identified four steps to the energy-management process above. We'll cover each of them in
turn:
1. Metering your energy consumption and collecting the data
As a rule of thumb: the more data you can get, and the more detailed it is, the better.
The old school approach to energy-data collection is to manually read meters once a week or once
a month. This is quite a chore, and weekly or monthly data isn't nearly as good the data that comes
easily and automatically from the modern approach...
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The modern approach to energy-data collection is to fit interval-metering systems that

automatically measure and record energy consumption at short, regular intervals such as every 15-
minutes or half hour. There's more about this on our page about interval data.
Detailed interval energy consumption data makes it possible to see patterns of energy waste that it
would be impossible to see otherwise. For example, there's simply no way that weekly or monthly
meter readings can show you how much energy you're using at different times of the day, or on
different days of the week. And seeing these patterns makes it much easier to find the routine
waste in your building.
2. Finding and quantifying opportunities to save energy
The detailed meter data that you are collecting will be invaluable for helping you to find and
quantify energy-saving opportunities. We've written an article that explains more about how to
analyze your meter data to find energy waste.
The easiest and most cost-effective energy-saving opportunities typically require little or no capital
investment.
For example, an unbelievable number of buildings have advanced control systems that could, and
should, be controlling HVAC well, but, unbeknown to the facilities-management staff, are faulty
or misconfigured, and consequently committing such sins as heating or cooling an empty building
every night and every weekend.
(NB "HVAC" is just an industry acronym for Heating, Ventilation and Air Conditioning. It's a
term that's more widely used in some countries than others.)
And one of the simplest ways to save a significant amount of energy is to encourage staff to switch
equipment off at the end of each working day.
Looking at detailed interval energy data is the ideal way to find routine energy waste. You can
check whether staff and timers are switching things off without having to patrol the building day
and night, and, with a little detective work, you can usually figure out who or what is causing the
energy wastage that you will inevitably find.
Detailed energy data is the key to finding the easiest energy savings
And, using your detailed interval data, it's usually pretty easy to make reasonable estimates of how
much energy is being wasted at different times. For example, if you've identified that a lot of
energy is being wasted by equipment left on over the weekends, you can:
Use your interval data to calculate how much energy (in kWh) is being used each weekend.
Estimate the proportion of that energy that is being wasted (by equipment that should be switched
off).
75
Using the figures from a and b, calculate an estimate of the total kWh that are wasted each
weekend.
Alternatively, if you have no idea of the proportion of energy that is being wasted by equipment
left on unnecessarily, you could:
Walk the building one evening to ensure that everything that should be switched off is switched
off.
Look back at the data for that evening to see how many kW were being used after you switched
everything off.
Subtract the target kW figure (ii) from the typical kW figure for weekends to estimate the potential
savings in kW (power).
Multiply the kW savings by the number of hours over the weekend to get the total potential kWh
energy savings for a weekend.
Also, most buildings have open to them a variety of equipment- or building-fabric-related energy-
saving opportunities, most of which require a more significant capital investment. You are
probably aware of many of these, such as upgrading insulation or replacing lighting equipment,
but good places to look for ideas include the Carbon Trust and Energy Star websites.
Although your detailed meter data won't necessarily help you to find these equipment- or building-
fabric-related opportunities (e.g. it won't tell you that a more efficient type of lighting equipment
exists), it will be useful for helping you to quantify the potential savings that each opportunity
could bring. It's much more reliable to base your savings estimates on real metered data than on
rules of thumb alone. And it's critically important to quantify the expected savings for any
opportunity that you are considering investing a lot of time or money into – it's the only way you
can figure out how to hone in on the biggest, easiest energy savings first.
3. Targeting the opportunities to save energy
Just finding the opportunities to save energy won't help you to save energy - you have to take
action to target them...
For those energy-saving opportunities that require you to motivate the people in your building, our
article on energy awareness should be useful. It can be hard work, but, if you can get the people on
your side, you can make some seriously big energy savings without investing anything other than
time.
As for those energy-saving opportunities that require you to upgrade equipment or insulation:
assuming you've identified them, there's little more to be said. Just keep your fingers crossed that
you make your anticipated savings, and be thankful that you don't work for the sort of organization
that won't invest in anything with a payback period over 6 months.
76
Insulation - it usually works well, even when it looks like this...
4. Tracking your progress at saving energy
Once you've taken action to save energy, it's important that you find out how effective your actions
have been:
Energy savings that come from behavioural changes (e.g. getting people to switch off their
computers before going home) need ongoing attention to ensure that they remain effective and
achieve their maximum potential.
If you've invested money into new equipment, you'll probably want to prove that you've achieved
the energy savings you predicted.
If you've corrected faulty timers or control-equipment settings, you'll need to keep checking back
to ensure that everything's still working as it should be. Simple things like a power cut can easily
cause timers to revert back to factory settings - if you're not keeping an eye on your energy-
consumption patterns you can easily miss such problems.
If you've been given energy-saving targets from above, you'll need to provide evidence that you're
meeting them, or at least making progress towards that goal...
And occasionally you might need to prove that progress isn't being made (e.g. if you're at your
wits' end trying to convince the decision makers to invest some money into your energy-
management drive).
Our article on energy-performance tracking explains how best to analyze your metered energy data
to see how well you're making progress at saving energy. Like step 2, this step is one that our
Energy Lens software has been specifically designed to help with.
Managing your energy consumption effectively is an ongoing process...
At the very least you should keep analyzing your energy data regularly to check that things aren't
getting worse. It's pretty normal for unwatched buildings to become less efficient with time: it's to
be expected that equipment will break down or lose efficiency, and that people will forget the
good habits you worked hard to encourage in the past...
So at a minimum you should take a quick look at your energy data once a week, or even just once
a month, to ensure that nothing has gone horribly wrong... It's a real shame when easy-to-fix faults
such as misconfigured timers remain unnoticed for months on end, leaving a huge energy bill that
could have easily been avoided.
But ideally your energy-management drive will be an ongoing effort to find new opportunities to
target (step 2), to target them (step 3), and to track your progress at making ongoing energy
77
savings (step 4). Managing your energy consumption doesn't have to be a full-time job, but you'll
achieve much better results if you make it part of your regular routine.
What is Payback Period :
One of the oldest and most widely used method to evaluate a capital investment proposal is the
Payback Period, as the name implies it refers to the time required to recover the initial investment
or the initial cash outlay as it is called in financial terms.
Simple Pay Back Period:

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:
Examples
Simple Payback period = First cost / Yearly benefits x Yearly cos ts
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:
According to the payback criterion, the shorter the payback period, the more desirable the pro.
Simple Payback period = 60/ 20 x 1.5 = 3 years 3 months
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 indi-
cates a more attractive investment. It does not use tedious calculations.
• It favours projects, which generate substantial cash inflows in earlier years, and dis-
criminates 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.
• It ignores cash flows beyond the payback period. This leads to discrimination against
projects that generate substantial cash inflows in later years.
78
Internal Rate of Return :
This method calculates the rate of return that the investment is expected to yield. The internal
rate of return (IRR) method expresses each investment alternative in terms of a rate of return (a
compound interest rate). The expected rate of return is the interest rate for which total dis-
counted benefits become just equal to total discounted costs (i.e net present benefits or net annual
benefits are equal to zero, or for which the benefit / cost ratio equals one). The criterion for
selection among alternatives is to choose the investment with the highest rate of return.
The rate of return is usually calculated by a process of trial and error, whereby the net cash flow is
computed for various discount rates until its value is reduced to zero.
The internal rate of return (IRR) of a project is the discount rate, which makes its net pre-
sent value (NPV) equal to zero. It is the discount rate in the equation:
CFt value will be negative if it is expenditure and positive if it is savings.

The internal rate of return is the value of "  " which satisfies the following equation:
The calculation of "k" involves a process of trial and error. We try different values of "k" till we
find that the right-hand side of the above equation is equal to 100,000. Let us, to begin with, try k =
15 per cent. This makes the right-hand side equal to:
30,000 30,000 40,000 45,000

------------ + ------------- + --------------- + --------------- = 100, 802
(1.15) (1.15)2 (1.15)3 (1.15)4
This value is slightly higher than our target value, 100,000. So we increase the value of k from
15 per cent to 16 per cent. (In general, a higher k lowers and a smaller k increases the right-
hand side value). The right-hand side becomes:
30,000 30,000 40,000 45,000

------------ + ------------- + --------------- + --------------- = 98, 641
(1.16) (1.16)2 (1.16)3 (1.16)4
79
Since this value is now less than 100,000, we conclude that the value of k lies between 15
per cent and 16 per cent. For most of the purposes this indication suffices.
Advantages
A popular discounted cash flow method, the internal rate of return criterion has several
advantages:
• It takes into account the time value of money.
• It considers the cash flow stream in its entirety.
• It makes sense to businessmen who prefer to think in terms of rate of return and find an
absolute quantity, like net present value, somewhat difficult to work with.
Limitations
• The internal rate of return figure cannot distinguish between lending and borrowing and
hence a high internal rate of return need not necessarily be a desirable feature.
Example
Calculate the internal rate of return for an economizer that will cost Rs.500,000, will last 10
years, and will result in fuel savings of Rs.150,000 each year.
Find the i that will equate the following:
Rs.500,000 = 150,000 x PV (A = 10 years, i = ?)
To do this, calculate the net present value (NPV) for various i values, selected by visual inspec-
tion;
NPV 25% = Rs.150,000 x 3.571 - Rs.500,000
= Rs.35,650
NPV 30% = Rs.150,000 x 3.092 - Rs. 500,000
= -Rs. 36,200
For i = 25 per cent, net present value is positive; i = 30 per cent, net present value is negative.
Thus, for some discount rate between 25 and 30 per cent, present value benefits are equated to
present value costs. To find the rate more exactly, one can interpolate between the two rates as
follows:
i = 0.25 + (0.30-0.25) x 35650 / (35650 + 36200)
= 0.275, or 27.5 percent
80
Economics of Energy:
Energy economics is the field that studies human utilization of energy resources and energy
commodities and the consequences of that utilization. In physical science terminology,
―energy‖ is the capacity for doing work, e.g., lifting, accelerating, or heating material. In
economic terminology, ―energy‖ includes all energy commodities and energy resources,
commodities or resources that embody significant amounts of physical energy and thus offer the
ability to perform work. Energy commodities - e.g., gasoline, diesel fuel, natural gas, propane,
coal, or electricity – can be used to provide energy services for human activities, such as lighting,
space heating, water heating, cooking, motive power, electronic activity. Energy resources - e.g.,
crude oil, natural gas, coal, biomass, hydro, uranium, wind, sunlight, or geothermal deposits – can
be harvested to produce energy commodities.
Energy economics studies forces that lead economic agents – firms, individuals, governments to
supply energy resources, to convert those resources into other useful energy forms, to transport them
to the users, to use them, and to dispose of the residuals. It studies roles of alternative market and
regulatory structures on these activities, economic distributional impacts, and environmental
consequences. It studies economically efficient provision and use of energy commodities and
resources and factors that lead away from economic efficiency.
LIFE CYCLE COST DEFINITIONS:

Life cycle cost is the total cost of ownership of machinery and equipment, including its cost of
acquisition, operation, maintenance, conversion, and/or decommission (SAE 1999). LCC are
summations of cost estimates from inception to disposal for both equipment and projects as
determined by an analytical study and estimate of total costs experienced in annual time
increments during the project life with consideration for the time value of money. The objective
of LCC analysis is to choose the most cost effective approach from a series of alternatives (note
alternatives is a plural word) to achieve the lowest long-term cost of ownership. LCC is an
economic model over the project life span. Usually the cost of operation, maintenance, and
disposal costs exceed all other first costs many times over (supporting costs are often 2-20 times
greater than the initial procurement costs). The best balance among cost elements is achieved
when the total LCC is minimized (Landers 1996). As with most engineering tools, LCC
provides best results when both engineering art and science are merged with good judgment to
build a sound business case for action.
Businesses must summarize LCC results in net present value (NPV) format considering
depreciation, taxes and the time value of money. Government organizations do not require
inclusion of depreciation or taxes for LCC decisions but they must consider the time value of
money.
INTRODUCTION
Procurement costs are widely used as the primary (and sometimes only) criteria for equipment or
system selection based on a simple payback period. LCC analysis is required to demonstrate that
operational savings are sufficient to justify the investment costs (often the investment costs, for
the lowest long term cost of ownership, are greater than for the simple payback period).
Simple payback criteria are a relative measure for only one case. The more complicated LCC
analysis works for comparing alternatives. The simple payback method is frequently used for small
capital expenditures which are so clearly economical that the time and expense of a full LCC
81
analysis is not worthwhile. Thus many companies demand short payback periods (1-1.5 years) to
keep everything simple with a large financial hurdle for a short time payback which discourages
capital projects unless they are big winners. The payback method uses the ($capital
cost)/($benefit/year) ratio as a screen for a single project alternative (it is not particularly useful for
sorting out multiple alternatives with variations in cost profiles and variations in capital).
Remember the adage attributed to John Ruston: ―It’s unwise to pay too much, but it’s foolish to
spend too little‖—this is the operating principle of LCC. For capital expenditures above
$10,000-$25,000 it is wise to consider the use of LCC. Procurement costs are only the tip of
the iceberg but the damaging portion of the iceberg relates to the bulk of other costs associated
with life cycle costing for equipment and systems.
Life cycle cost was strong in the 1960s when LCC was the subject of considerable interest and
publications. Many original works on LCC are out of print. Newer publications are emerging such
as:
1) RMS Guidebook (SAE 1995) for a life cycle cost summary,
2) Reliability and Maintainability Guideline for Manufacturing Machinery and Equipment
(SAE 1999) for introducing details on how equipment survives and how it is restored to
operating conditions as a method for decreasing life cycle costs by way of both a strategy and
tactics for how reliability tools, used up-front, can reduce costs and
3) Life-Cycle Costing Manual for the Federal Energy Management Program NIST
Handbook 135 (US Government 1995) for background and methodology for US Government
calculations along with annual supplements for discount factors (US Government 2002).
SAE advocates reducing life cycle costs for equipment in the automotive sector by showing
show/why reliability and maintainability must be included in upfront decisions for strategic and
tactical issues of achieving the lowest long term cost on ownership. LCC concepts are resurging
with US Government efforts to minimize energy costs.
Remember this adage when considering LCC limitations: ―In the land of the blind, a one-eyed
man is king!‖ LCC improves our blinded sight—we don’t need the most wonderful sight in the
world, it just needs to be more acute than our fiercest competitor so that we have an
improvement in the cost of operating our plants. USA Department of Defense (DOD) tools
and techniques are frequently used effectively in commercial areas and this is true of life-cycle
costing. Numerous references to LCC papers are listed in cumulative indexes for a major
symposium (RAMS 2001). Major references for LCC in the DOD area are MIL-HDBK-
259 for LCC details, MIL-HDBK-276-1 and MIL-HDBK-276-2 as form guides for details
and for importing data into specific software.
WHY USE LCC?
LCC helps change provincial perspectives for business issues with emphasis on enhancing
economic competitiveness by working for the lowest long term cost of ownership which is not
an easy answer to obtain. Consider these typical problems and conflicts observed in most
companies:
1. Project Engineering wants to minimize capital costs as the only criteria,
2. Maintenance Engineering wants to minimize repair hours as the only criteria,
3. Production wants to maximize uptime hours as the only criteria,
4. Reliability Engineering wants to avoid failures as the only criteria,
5. Accounting wants to maximize project net present value as the only criteria, and
82
6. Shareholders want to increase stockholder wealth as the only criteria.
Management is responsible for harmonizing these potential conflicts under the banner of
operating for the lowest long term cost of ownership. LCC can be used as a management
decision tool for harmonizing the never ending conflicts by focusing on facts, money, and time.
Why should engineers be concerned about cost details for LCC? It is important to help engineers
think like MBAs and act like engineers for profit making enterprises--It’s all about the money!
Economic calculations are well defined but the discount rate is important (US Government
2002). Accounting and finance organizations set internal discount rates (which often change) to
make economic decisions easy for engineers. Discount factors reflect a host of relationships and
considerations which include very low risk investment returns such as Government T-bills,
factors for projects such as estimated uncertainty errors, internal rates of returns, and so forth. In
general, consider a typical discount value of 12% which is neither very low nor very
high for calculations which will follow (the discount rate can also be used for inflation/deflation
factors):
1. What is the present value (PV) of US$1.00 today over time? [Think what will be the real
value of the loan made to your no-good brother-in-law if it every gets repaid.]
2. What is the future value (FV) of US$1.00 received over time? [Think what will be the value
of your pension if you can live long enough to collect on it.]
Cash flows into/out of a business. The discounting method summarizes transactions over the life of the
investment in terms of present or future dollars. Table 1 discount rates (used as multipliers or dividers)
put financial transactions into the present value of money to answer the two questions posed above.
Engineering always want a simple, single value, criteria for a project—the answer for LCC is called
net present value (NPV). NPV is the present value of proceeds minus present value of outlays.
Projects and processes with the greatest NPV is usually the winner. Often for incremental changes on
a project or within a plant, you lack enough details to arrive at a positive NPV. Thus many
improvement projects must be selected on the least negative NPV values from many alternatives.
So once again, we can have the single number engineers always want—it’s NPV but in this case, it’s
the least negative NPV.
Most fixed assets and other projects have a limited useful life. All equipment has a
finite life based on both deterioration and obsolescence. The most common depreciation
methods is straight line depreciation based on acquisition cost less salvage. Straight line
depreciation is based on consumption of a fixed percentage of the equipment cost. Often straight
line depreciation is used for internal accounting reports of profit/loss and for calculating NPV.
Income tax rates vary and may require inclusion of state as well as federal taxes. For calculation
purposes, consider the tax rate is 38% based on the profit before tax numbers. Profit before
taxes may be positive or negative. When profit before tax is negative, the company receives a
tax credit either a carry-back or carry-forward. When profit before tax is positive, the company
pays taxes. For a project or process, tax numbers are used to calculate cash flows. After the tax
is included, the cash flow is discounted to get present value, and the sum of all present values
gives the NPV.
83

Energy Conservation and Management

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Energy Conservation and Management

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ME-PRODUCTION ENERGY CONSERVATION & MANAGEMENT

Primary and Secondary Energy

Primary energy sources are Thermal

Commercial Energy and Non Commercial Energy

Examples: Electricity, lignite, coal, oil, natural gas etc.

 Renewable and Non-Renewable Energy

 Global Primary Energy Reserves*

(*Source: BP Statistical Review of World Energy, June 2004)

BP Statistical Review of World Energy 2004 © BP

Figure 1.3 Global Primary Energy Consumption

Table 1.1: Primary Energy Consumption by Fuel , 2009

Energy Distribution Between Developed And Developing Countries

Although 80 percent of the world’s

Indian Energy Scenario:

 Natural Gas Supply

 Electrical Energy Supply

The all India installed capacity of electric power generating

 Nuclear Power Supply

 Hydro Power Supply

 Final Energy Consumption

 Sector wise Energy Consumption in India

The major commercial energy consuming sectors in the

Figure 1.5 Sector Wise Energy

 India’s Energy Needs

Figure 1.6 Expenditure Towards Energy Sector

 Per Capita Energy Consumption

Primary energy consumption per capita

BP Statistical Review of World Energy 2004 © BP

Long Term Energy Scenario For India:

The plan document puts compound annual growth

 Energy Conservation and its Importance

Today, 85% of primary energy comes from

What is Energy Conservation?

Heat loss and Heat Gain:

 Sensible Gain and Latent Gain

 Cooling and Heating Load Calculations:

Conduction/convection of heat through walls, roofs, floors, doors and windows.

 The CLTD/CLF Method

 Factors Affecting Thermal Performance

 CO2 emissions targets can be met by a combination of means, such as:

Air-tight construction of the building envelope.

Energy efficient appliances and fittings (e.g. boilers and lighting).

Automatic controls and building management systems.

Use of zero-emission technologies such as solar water heating and photovoltaics.

Provision of well designed solar shading.

Use of natural or assisted ventilation to reduce reliance on air conditioning.

AIM: MODERN TECHNIQUES IN ENERGY CONSERVATION

Need for energy conservation:

Year energy consumed

1) 1960 13.27 * 10^12

Method of energy conservation

 Efficiency improvement in thermal power plant

Step 1 Evolve comprehensive energy management policy.

Step 2 conducting a detailed energy audit.

Primary losses Secondary losses

Overheating (absence of control) Hot effluents (waste liquoirs)

Overcooling (faulty controll) Cooling water (to cooling tower)

Low power factor, excessive lighting

Step 4 Implementation of energy conservation program.

Step 5 Reviews of achievements.

 Energy Management Control Systems

Programs must be scheduled according to application requirements, such as controlled device

 The digital computer performs the following functions:

 Technology for energy conservation