EE 604 ECM Notes 1

LAKSHMI NARAIN COLLEGE OF TECHNOLOGY, BHOPAL
ELECTRICAL & ELECTRONICS ENGINEERING DEPARTMENT

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ELECTRICAL ENGINEERING DEPARTMENT
RAJIV GANDHI PROUDYOGIKI VISHWAVIDYALAYA, BHOPAL New Scheme

Based On AICTE Flexible Curricula Electrical Engineering, VI-Semester Open
Elective EE-604(B) Energy Conservation and Management
LNCT Electrical Engineering VI Sem (A+B) Section
Name of Faculty’s
1. Dr. Anand Singh (EE-VI-A)
2. Prof. Vikarm Singh (EE-VI-B)
Prepared by Dr. Anand Singh. HOD (EX)
Topic Covered
Basic of Energy Management, Role of
Energy Managers
1.1 Energy Management
Many definitions have been offered for “energy management”. One definition that
captures the key principles is as follows:
Energy management is the art and science of optimum use of energy to

maximize profits (minimise costs) and thereby improve the economic competiveness.
The energy should be used efficiently, economically and optimally.
Energy management can also be defined as the science involving planning,

directing, controlling the supply and consumption of energy to maximize productivity
and comforts and minimise the energy costs and pollution with conscious, judicious and
effective use of energy.
The energy management involves strategy, policy, organisational changes,

energy audit, energy conservation measures, administrative actions, training and
awareness programmes, monitoring of energy conservation efforts etc.
Among the practices that arise from the above definition are the following:
Eliminate Waste: Ensure that energy is used at the highest possible efficiency.
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Maximize Efficiency: Utilize the most appropriate technology to meet organizational

needs.
Optimize Supply: Purchase or supply energy at the lowest possible cost. Energy
management practices may vary from simple maintenance and operational activities that
ensure equipment and systems use energy efficiently and effectively, to capital intensive
installation of new, more efficient technology.
Some desirable sub-objectives of energy management programs include:
1) Conserving energy, thereby reducing cost

2) Cultivating good communications on energy matters
3) Developing and maintaining effective monitoring, reporting, and management
strategies for efficient energy usage
4) Finding new and better ways to increase returns from energy investments through
research and development
5) Developing interest in and dedication to energy management program from all
employees.
1.2 Motivation to energy management
There are many motivational forces for energy management presently acting on the
industrial sector. They are:
1.2.1. Competitiveness:
Although energy cost may constitute a relatively small part of total operating cost, for
many industries, it is one of the most manageable resources among labor and material.
Reductions in energy consumption and thereby reducing energy cost are very vital for
any industry to remain competitive.
1.2.2. Short Falls in power supplies

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Due to limitations in power supply infrastructures, many industries face power supply
problems in terms of reliability and quality of the power supply and increasing energy
demand and industrialization have led to predictions of a serious supply shortfall.
1.2.3. Environmental Management Systems
In certain parts of the world, especially in Europe, ISO 14001 standard on

environmental management is increasingly becoming a requirement for trade. Energy
management is an important component of environmental management and waste
reduction strategies, and features significantly in ISO14001.
1.2.4. Global Climate Change:
The global climate is changing because of human activity, and that one of the major
causes of climate change is the emission of Greenhouse Gases (GHG), principally CO2,
into the atmosphere from the combustion of fossil fuels. Since fossil fuels, directly or
indirectly, are important energy sources to industry, there is international pressure to
reduce GHG emissions by reducing energy consumption.
1.3 Fundamental Principles of Energy Management
At the most elementary level, energy management may be thought of as ‘task energy use’
e.g. the provision of as much energy as is needed, when it is needed, where it is needed,
and with the right quality.Implicit in task energy use is the concept of meeting energy
requirements with ‘waste’ heat, or dissipated energy from another process. By
approximately “cascading” energy use, the maximum utilization of the energy quality is
obtained. This is in itself a fundamental aspect of energy management, since a “joule
(Btu) is not a joule (Btu).” Why not? Because the energy content of a swimming pool of
lukewarm water is roughly the same as a litre of Petrol. However, while the energy
content is the same, the work which can be accomplished by a litre of Petrol is much
greater than the work which can be done by a swimming pool of warm water!
In its most elementary development, energy management involves the utilization of the
minimum quantity of energy required for the task at an appropriate quality, neither
better
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nor worse than needed. High grade fuels such as oil or natural gas and high quality
electricity often used to generate hot water or water or low-temperature process stream.
In the strict thermodynamic sense, this is a misuse of the potential value of the fuel. The
best use would be to employ a topping cycle such as gas turbine to extract work initially
and then use the low quality” waste” heat for process steam production or water heating.
Although there is a very great diversity in energy end-use technology, it appears that
there are certain basic approaches or general principles which apply in a wide variety of
applications. Identification of fundamental principles for energy management is an
attractive concept because it suggests an initial approach to the problem. The principles
alone will not improve use efficiency, but they can provide a basic for a rational
approach for developing more specific technology responses.
Table 1.1 summarizes some general principles which experience has shown are
applicable to a wide variety of situations. The table also provides an approximate,
highly qualitative assessment of relative cost, implementation time, complexity and
benefits. These principles are discussed briefly in the following paragraphs:
Table 1.1 summarizes some general principles which experience has shown are
applicable to a wide variety of situations.
Sl. Principle Relative Relative Relative Relative

No Cost Time to Complexity Benefit
Implement (Typical)
1 Review historical Low 1 year Low 5 – 10%
energy use (review of
historical data)
2 Energy audits (review Low 1 year Low 5 – 10%
of current practices)
3 Housekeeping and Low 1 year Low 5 – 15%
maintenance
4 Analysis of energy use Low to 1-2 years Moderate to 10 – 20%
(engineering analysis, moderate high
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computer simulation,
availability studies)
5 More efficient Moderate Years Moderate to 10 – 30%
equipment to high high
6 More efficient process Moderate Years Moderate to 10 – 30%
to high high
7 Energy containment Low to Years Moderate to 10 – 50%
(heat recovery and moderate high
waste reduction)
8 Substitute material Low to 1 Years Low 10 – 20%
moderate
9 Material economy Low 1-2 Year Low 5 – 15%
(scrap recovery,
salvage and recycle)
10 Material quality Low 1 year Low 5 – 15%
selection (material
purity and properties)
11 Aggregation of energy Moderate Years Moderate to 20 – 50%
uses to high high
12 Cascade of energy use Moderate Years Moderate to 20 – 50%
to high high
13 Alternative energy Moderate Years Moderate to 10 – 30%
sources (energy from to high high
or fuel substitution)
14 Energy conversion Moderate Years Moderate to 10 – 30%
to high high
15 Energy storage Moderate Years Moderate to 10 – 30%
to high high
16 Economic evaluation Low 1 year Low 5 – 15%

(cost benefit, rate of
return, life-cycle
costing)
1.3.1 Review of Historical Use

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The first principle is to review historical energy use. Often the question “why do we do
this?” And the answer ‘that’s the way we’ve always done it” flag an area for immediate
savings. Sometimes seasonal variations or scheduling discontinuities are present but
unrecognized; the review process bring them to light and may suggest ways of
combining operations or otherwise effecting savings. Historical data are never
sufficient, however, since they provide the total picture but not the details.
1.3.2 Energy Audits
Energy audits are a means for investigating energy use by specific process and
machines, and provide insight into inefficient operations.
1.3 Improvement of Housekeeping And Maintenance
Improving housekeeping and maintenance in the plant will generally save energy. Well-
lubricated equipment has reduced frictional losses. Cleaned light fixtures transmit more
light. Charging filters reduce pressure drop
1.3.4 Analysis of Energy Use
Analysis of energy use goes hand to hand with the energy audit to determine how
efficient the equipment is, to establish what happens if a parameter changes
(reduce flow by 50 percent),or to simulate operations (computer models of building or

process energy use).
1.3.5 More efficient equipment
More efficient equipment can often be substituted to fulfill the same function; e.g.,
sodium or metal halide lamps rather than incandescent lamps for area lighting. Many
types of industrial and residential/commercial equipment are now rated or labeled in
terms of their efficiency there are wide variations among different manufacturers
depending on size, quality, capacity and initial cost.
1.3.6 More efficient processes

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More efficient processes can often be substituted without detrimental effect on product
quality. A classic example is a continuous steel rolling mill, which uses a continuous
process to produce steel products, avoiding the energy loss involved in cooling and
reheating in batch production. Another example is powder metallurgy rather than
machining to reduce process energy; still another is a dry paper-making process which
reduces energy expanded to remove water from the finished product. Inert atmosphere
ovens can reduce the energy used for dry solvent-based paints, compared to ultraviolet
bake ovens.
1.3.7 Energy Containment
Energy containment seeks to confine energy, reduce losses and recover heat. Examples
include repair of steam leaks, better insulation on boilers or piping and installation of
recuperators or power recovery devices. Compressed air system leaks and HVAC
infiltration also result in energy losses.
1.3.8 Substitute Materials
Substitute materials can sometime be used to advantage. For example, in low

temperature applications, low-melting-point alloys can be substituted for high
temperature materials. A materials which is easier to machine or which involves less
energy to manufacture, can be used without baking in certain applications.
1.3.9 Material Economy
Material economy implies recovery of scrap, reduction of waste and ‘design for salvage
.’ the power metallurgy example cited above also illustrates this principle. Product
design which permits salvage or recovery of reusable parts, motors, and components is
another example. Structures, in fact, can be designed for reuse and relocation.
1.3.10 Materials Quality
Materials quality selection is extremely important, since unnecessary quality almost

always means higher cost and often means greater energy use. For example is distilled
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water needed or is de-ionized sufficient? Purity of chemicals and process streams has an
important impact on energy expenses; trace impurities may not be important for many
applications.
1.3.11 Aggregation of energy
Aggregation of energy helps in achieving greater efficiency to be achieved in certain

situations. For example, in a manufacturing plant it is possible to physically locate
certain process steps in adjacent area so that the energy used for transportation of
materials is minimized.
1.3.12 Cascade Of Energy Use
Proper time sequencing of operations can also reduce energy use, for example by using
temperatures generated by one step of the process to provide preheating needed by
another step.
1.3.13 Alternate Energy Sources
For several applications such as low grade heating or drying, solar thermal systems like
Solar Water Heaters/ Solar Air dryers can be used for 300 days in a year. Biomass
briquettes can be used for direct firing in Boilers.
1.3.14 Energy Conversion
Some of the applications the form of energy being used can be changed to another form
to save over all energy. Applications include changing compressed air grinders to
electric grinders, changing electric heating to steam heating etc.
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1.3.15 Energy Storage
Thermal Energy Storage systems are used to store thermal energy in energy storage
reservoirs for later use. These are employed to balance energy demand between day
time and night time. The thermal reservoir may be maintained at a temperature above
(hotter) or below (colder) that of the ambient environment. The applications today
include the production of ice, chilled water, or eutectic solution at night, or hot water
which is then used to cool / heat environments during the day.
1.3.16 Economic Evaluation
Economic evaluation is an essential tool of energy management. New equipment

processes, or options must be studied to determine costs and return. Operating costs,
investment tax credits, taxes, depreciation, and the cost of capital must be included in
the analysis for a realistic picture, particularly if escalation of fuel and energy price is
considered.
Implementation of these concepts can take place at several levels. Modification and
retrofit can be applied to existing equipment and facilities. These can involve either
operating budget or capital, depending on project size and complexity.
In new facilities, plant designers have many opportunities to improve efficiency, often
without increasing capital costs, simply by planning which takes into account the
anticipated cost and scarcity of energy and fuel. Finally, in construction, builders can
specify the most efficient equipment and materials economically justified when energy
costs were negligible, the initial cost of equipment was often the important
consideration. Now, with higher operating costs to be expected, a higher initial cost may
be justified if it saves over the project’s lifetime.
1.4. The History of Energy Management

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The management of energy and improving energy efficiency has long been important
for industry and commerce. Boulton and Watt's early steam engines produced
competitive advantage because they were more fuel efficient. In World War 2 fuel
efficiency became vital to the war effort and the National Industrial Fuel Efficiency
Service was set up to provide advice to industry on energy saving measures as fuel
shortages continued in the post-war years. Energy management as a separate discipline,
however, began to evolve after the first oil crisis of 1973 and really came into effect
after the second oil crisis of 1979 when real energy prices rose dramatically.After more
than a quarter of a century it seems an appropriate time to look back at the evolution of
modern energy management. In looking back three distinct phases can be identified:
 Phase 1: 1973 – 1981 – "save it"

 Phase 2: 1981 – 1993 – "manage it"
 Phase 3: 1993 – 2000 – "purchase it"
In looking forward two further phases are considered likely:
 Phase 4: 2000 – 2010 – "response to the climate change issue"

 Phase 5: 2010 –2020 – "clean technology".
Each of these will be described in turn. All dates are approximate and of course there
has been a natural evolution of techniques and approaches, rather than a sudden
transition between phases.
1.4.1 Phase 1: "Save it" - 1973 - 1981
Phase 1, between 1973 and 1981, was characterised by the "save it" mentality and a
crisis response to sudden increases in energy prices and problems with energy supplies.
Energy conservation was the usual description of the activity. In this phase there was
generally a shallow approach with wide variation in approach between practitioners and
few common techniques. Many companies appointed Energy Managers who typically
were engineers, often the engineering manager taking on the energy role in addition to
their normal job.
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A few organisations appointed accountants or purchasing staff as energy managers but

this was unusual.
Few organisations had any form of energy Monitoring and Targeting and when they did
there was no commonality of approach. Most systems were manual and did not take into
account variances due to factors such as weather, production output or product mix.
Much effort was put into exhorting staff to "switch off" through the use of stickers over
light switches and posters. The effectiveness of this was probably limited.
Engineering based energy managers started to invest in energy saving technologies but
with little in the way of investment analysis beyond simple payback period. There was
generally a gulf of understanding between energy mangers seeking investment funds
and financial managers in charge of capital budgeting and many seminars and courses
sought to fill the gap. On the technical front new technologies emerged and were often
adopted before they were fully developed e.g. heat pumps – leading to sub-optimal
investment. There was also a number of "black boxes" introduced that purported to save
energy but which were of dubious value.
Energy supplies were almost totally from the nationalised utilities, British Gas, British
Coal and the Electricity Supply Industry in the form of the CEGB and the 12 regional
distribution companies. There was little or no scope to negotiate prices even for large
users. A few large, sophisticated users, generated their own electricity in CHP schemes
with no export of power.
Government activity in this phase concentrated on "propaganda" and exhortation in the

form of TV advertisements, posters, and "Switch off" stickers, and subsidising energy
surveys which led to the rise of energy consultancy, much of it carried out by people
with little or no experience. Towards the end of the period the UK Government started
the Energy Conservation Demonstration Projects Scheme which subsidised early
adopters of new technologies in return for the right to disseminate information about
the results. In
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an early work the author (1) observed that the scheme was not market orientated and
ignored the fundamentals of successful innovation and diffusion.
1973 – 1981: Major energy events and headlines:
1973: OPEC quadruples price of oil
1979: Iranian revolution leads to second oil price rise
1.4.2 Phase 2: "Manage it" - 1981-1993
This period saw the development of energy management as a separate recognised

discipline and the rise of full time Energy Managers. The UK Government also
supported regional Energy Managers groups which were an excellent way of spreading
information, sharing resources and improving standards. The term energy management
started to replace energy conservation. Several models of effective energy management
(2) were developed and widely implemented. A consensus on what energy management
was started to emerge.In this period Monitoring and Targeting began to be used widely
and in a more developed way. This was aided by the introduction of personal computers
(then called "micro-computers") in the early 1980s and the rise of the PC as we know it
today. Monitoring and Targeting software was introduced and linked to bill analysis
software derived from the discipline of utility bill analysis. Computerised M&T systems
could take into account relevant factors such as Degree Days for space heating and
production levels. M&T was subsidised and promoted by the Government with good
effect through the sector Trade Associations.Another approach that emerged in this
period was the use of Performance Indicators for focusing attention. This was
particularly effective in local authorities in the form of Normalised Performance
Indicators (NPIs) developed by the Audit Commission (4) and implemented as a
national system.
In this period a key technology that emerged was Building Energy Management
Systems (now more often called BMS). These were widely adopted by owners of large
portfolios such as local authorities and undoubtedly bought benefits in terms of central
alarm handling and control of building services. There is considerable evidence that the
cost effectiveness of these investments was not always as advertised. Early systems used
mini
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computers as central stations and were extremely expensive to install but costs fell as
PCs were introduced and more "intelligence" was added to outstations, thus reducing
field wiring costs.
This period saw the peak of the energy management consultancy market with many
large organisations bringing in consultancy teams to establish M&T systems, carry out
audits, implement projects and deliver communication and awareness schemes. The
latter became more sophisticated with greater user involvement and in some cases
incentive payments (for local establishments or individual user groups).
Another major development in this period was the introduction of Contract Energy
Management (CEM) which initially went under various names including "third party
financing", "performance contracting" and "Energy Service contracting". Early schemes
were extremely difficult and expensive to negotiate and implement, particularly in the
public sector where external finance was most needed and where arcane Treasury
guidelines on local authority expenditure meant that even capital expended by a CEM
company counted against the authority's capital budget, thus introducing a no-win
situation. These rules were finally changed in 1986 following a concerted effort from
the nascent CEM industry and potential customers (including the author).
1981: first micro-CHP technology introduced
1984/85 : Coal miners strike
1986: Energy Efficiency Year led by Secretary of State Peter Walker
1986: privatisation of British Gas
1990: privatisation of electricity supply industry, competition for > 1 MW users
1992: competition for > 2,500 therm gas users
1.4.3. Phase 3: "Purchase it" - 1993 – 2000

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In this period energy management as a discipline entered a decline which came about as
a result of two factors, the reduction in real prices bought about by privatisation of the
utilities, and general corporate down sizing. As energy prices declined in real terms, and
opportunities for effective purchasing strategies were opened up by market
liberalisation, most of the attention on energy shifted purely to purchasing. Greater
savings with less risk could be made through more effective purchasing than through
implementing energy efficiency projects. Many energy managers were made redundant
or transferred into other jobs and many large organisations which had been pioneers of
energy management started to lose ground.
In this period the energy consultancy market declined dramatically except in the area of
purchasing. In Government activity there was a shift away from subsidies and towards
encouraging management approaches through voluntary agreements and management
tools such as the Making A Corporate Commitment and the energy management matrix.
The environment emerged as an issue in this period and many companies incorporated
energy management into wider environmental initiatives. This did not, however, do as
much for energy efficiency as some enthusiasts had hoped. Investments still had to meet
the required Internal Rates of Return and often corporate downsizing meant that
organisations did not have the staff to identify, evaluate and implement viable energy
efficiency opportunities. Even at the reduced energy prices bought about by more
effective purchasing much potential for improved efficiency remained untapped (and
still does).
1994: competition for < 100kW electricity market
1998: domestic gas liberalisation and competition for < 100 kW electricity market
The future?
So where does energy management go from here? The following two phases represent a
personal opinion based on analysis of current technological, managerial and social
trends.
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1.4.4. Phase 4: "Respond to Climate Change Levy" - 2000 – 2010
In this period in the UK the effects of the Climate Change Levy and the various
Negotiated Agreements will start to be seen. CCL will make energy a high level issue
again as energy prices rise and many companies make clear commitments to reduce
consumption, and face penalties for failure to do so. It is debatable how effective the
Agreements will be in creating additional savings relative to those that would have
occurred through normal technological change, but at least explicit targets have been
agreed and performance will be measured against these.
Government activity will shift towards site specific advice and various "arms length"
programmes run by the Carbon Trust. Governments everywhere are likely to step up
support for renewables and energy efficiency as global warming becomes more of an
issue. Additional carbon or other environmental taxes are likely to be introduced in
many countries.
In the UK energy market the effects of the New Electricity Trading Arrangements
(NETA) balancing system will come into play and the gas market will move towards
hourly pricing. The electricity industry will slowly transition towards distributed
generation with multiple small sources of power being driven by multiple technologies
including micro-gas turbines, multi-fuel engines and renewables.
The energy outsourcing market will develop in new directions away from simple supply
of secondary commodity and "cost plus" based FM services. The more innovative
energy companies, such as Enron, will lead the market by offering customers a variety
of energy solutions that incorporate energy supply and demand side management. These
will be contracts in which the supplier is incentivised to reduce consumption in the
customer's facilities through the use of performance based design and contracting
arrangements which focus attention on optimising total energy life cycle costs, including
capital, commodity and O&M costs.
Techniques in which real measured data is used to drive engineering decisions

("intellectual engineering") will become more widely accepted as the price of data
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gathering and processing comes down still further and this will help to optimise capital
and running costs of major plant. Information technology will help close the gulf
between design of plant and actual operating performance through the use of real time
performance measurement and control over the Internet. Specifiers and contractors will
increasingly adopt building control communications standards such as LonWorks.
This period will also see on-site trials of technologies such as fuel cells and an increase
in the amount of power generated by renewable sources of energy once barriers caused
by NETA are overcome.
2000 – 2010: Major energy events and headlines (actual and
predicted): 2001: Climate Change Levy introduced
2001: NETA introduced
2005: commercial fuel cell CHP technology introduced
2008: first fuel cell vehicles available commercially
1.4.5.Phase 5: "Clean technology" - 2010 - 2020
As we look further ahead the vision of the future becomes less clear but it is likely that
advanced clean technologies such as fuel cells will become widely available and
adopted by main stream users. Other technical innovations that will impact on energy
efficiency in this period will include High temperature Superconductivity and smart
materials. Real time management, including real time pricing of energy and the creation
of real time markets for the provision of energy efficiency, as well as services such as
maintenance will also become widely adopted. These systems will have considerable
"intelligence" built in to allow automatic decision making and optimisation in real time.
Within this time frame it is not impossible that some new energy source (cold fusion or
biologically generated solar energy conversion?) will be commercialised although it is
likely to take a decade or more to gain a major market share.Major energy events and
headlines
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2010: Markets for energy saving ("negaWatts") become operational
2015: High Temperature Superconducting cables and wires become common
2020: Genetically engineered biological solar energy sources become viable
1.6 Energy Manager Basics
The role of an Energy Manager (EM) involves facilitating energy conservation by

identifying and implementing various options for saving energy, leading awareness
programs, and monitoring energy consumption. As such, EMs play a critical role in the
successful implementation of energy conservation and demand management programs
within the industry.
1.6.1 Saving Energy
EM duties revolve around the identification, reporting and implementation of energy

savings opportunities. For quick reference, the responsibilities identified in the EM
Agreement are summarized below:
• Electrical Energy Saving Project Implementation
• Energy Tracking & Monitoring
• Primary Assessment
• Maintenance and Operating Schedules
• Energy Savings Opportunities & Action Plan
• Measurement & Verification Strategy
• Energy Management Behaviour and Business Process Improvements
• Employee Awareness Programs

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• Assistance to IESO Projects
• Reporting
Continuation of funding is primarily decided on the basis of energy savings target

achievement and future savings potential. Properly and thoroughly reporting savings is
essential to retaining funding.
1.6.2 Industrial Accelerator Program Initiatives
Under the IESO’s Industrial Accelerator Program (IAP), you have a wide range of
initiatives available to help you fund the energy conservation projects that you identify.
All successful energy managers use these programs. Available IAP incentive programs
are listed here:
Retrofit
Process and Systems
Incentive Paths:
Prescriptive/Engineered/Custom
Technology Specific Incentive Offerings:
Preliminary & Detailed Engineering Studies
Project Incentives
Motors
VFDs
Compressed Air
Synchronous Belts Unitary AC

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Interior Lighting
Exterior Lighting Lighting Controls
High Performance New Construction
For program-specific details, please visit

http://www.ieso.ca/Pages/Participate/Industrial- Accelerator-Program/default.aspx
1.6.3 Annual Savings Targets
EMs must meet two targets as laid out in the IAP Energy Manager Funding Agreement:
• Minimum 2,000 MWh Annual Savings Target
• Minimum 10% of Annual Savings Target attributed to Projects not financed by

IESO incentives (non-incented)
Understanding that it can be challenging to reach the targets in the first year of the
agreement, if the EM does not meet the Annual Savings Target in the first twelve month
period of the Agreement, the shortfall will be added to the Annual Savings Target for
the second twelve month period. There is no adjustment in the maximum funding
amount if some of the missed target in the first year is carried over to the second year.
And the transfer of the target is only available in the first year.
Performance will be assessed based on Quarterly Reports submitted by EMs.
1.6.4 Reporting
Energy management activities and conservation measures must be reported in Quarterly

Reports. Quarterly Reports are submitted to the IESO for review and approval under the
EM Funding Agreement.
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As part of the reporting requirements under the EM Funding Agreement, EMs are
required to prepare the following reporting documents:
• Quarterly Reports within 30 days of the end of each quarter.
• EMs are encouraged to provide the Quarterly Reports as close to the end of each
quarter as possible.
• It is recommended that the Quarterly Report be maintained as a living document

and used for project tracking purposes, such that it can be provided to the IESO at any
time, without need of significant updates.
• An Energy Management Plan (EMP) for each Facility occupied by the

Participant, no later than six (6) months after the EM’s employment start date, unless an
EMP already exists.
• An updated EMP is required for each subsequent twelve (12) month term.
It is highly recommended that Energy Managers make use of the Quarterly Report
Template.
1.6.5 Quarterly Report Reviews
• Each Quarterly Report will be reviewed by the IESO’s Technical Reviewer so

that the likelihood of targets being met can be assessed.
• Mid-term technical review of non-incented Measures can be valuable to IESO

accounting.
• Quarterly Reports should include all Measures to date, including those in

previous reports and those that have been reviewed.
• Quarterly Reports should also include Projects planned for the next term that
show the potential to meet the next term’s targets.
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1.6.6 Annual Reviews
• At the end of the fourth quarter of each EM term, an annual review will be
performed by the IESO’s Technical Reviewer to determine whether targets have been
met.
• The annual review is based on the fourth Quarterly Report, which should
identify all Projects that are complete and in-service such that they can be counted
towards the current term’s Annual Savings Target.
Technical Review of Non-Incented Savings
Technical review of non-incented savings are conducted as the pre and post project
information becomes available. This review may occur during a Quarterly Report
review or the Annual Review.
• During the Quarterly & Annual Review process for EMs, the IESO’s Technical
Reviewer will perform a technical review of significant non-incented projects in order
substantiate and verify the reported savings.
• For all other non-incented savings, the IESO’s Technical Reviewer will still
perform a high level check to ensure that the reported savings are reasonable and to
assign a persistence value.
• In order to enable the review of non-incented projects, it is recommended that

additional documentation be maintained, such as spillover forms, supporting
calculations, operating conditions and technical specifications for pre and post project
equipment.
• In addition, it is also recommended that pre and post project Measurement and
Verification (M&V) be conducted for non-incented projects, where feasible, to provide
support for the claimed energy savings.
o The best support of any project is robust pre-project and post-project power
consumption data as collected with power meters or similar instrumentation.
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o IPMVP-level M&V may not be warranted, but reasonable M&V should be

performed for the benefit of internal project management, as well as IAP reporting.
An M&V strategy for ALL substantial projects is a characteristic of successful

energy management and a proven strategy for gaining management buy-in.
1.7 Energy Manager Strategies for Success
Meeting targets, especially in the first year, can be challenging. Planning and strategy
are critical to success. The following section is a compilation of recommendations based
on lessons learned by EMs under the save ON energy program.
1.7.1 Early Activities
1. Establish what your current situation is: Learn about your internal funding cycle,
including critical dates
a. The timing of Participant/client budget cycles will influence what your initial
focus should be. Assess your opportunities to secure funding for capital projects in time
to complete those projects in your first term.
b. Project funding timing and availability will be a major factor in the balance
between focusing on a few large projects to meet a deadline vs. building a funnel of
opportunities for future funding while prioritizing low cost (operational) projects.
2. Orient yourself: Learn the capital approval process, including how to prepare
and craft a business case, who the decision-makers are what their influencing factors are
a. Your business cases need to speak in the language of your organization. Rather
than kW and kWh, and besides dollar figures (which are always important), it may help
to compare energy cost reductions to an equivalent unit of production.
i. E.g. Energy savings are the equivalent of additional sales of 5,000 widgets per
month.
&
1.7.2 Planning for the Short and Long Term
Ramping up an Energy Manager program can be one of the greatest challenges to an

EM, and identifying projects is sometimes the easiest part. Once projects are identified,
they can be delayed or scheduled for action much later than the EM might want due to
the timing of annual budgets and windows of opportunity that are only open during
scheduled plant shutdowns. Time to complete studies and resolve technical issues can
also delay completion dates. Despite all the potential for lengthy delays, EMs are
expected to meet their first-year targets.
This difficulty can be mitigated with a plan that splits its focus between the short and
long term. Large projects that take substantial investment should be developed with a
view to the long term, while a portfolio of projects that can be completed quickly should
be developed and acted on to ensure first-year success. Short term projects should then
be completed as soon as possible.
This is not to say that long-term project should not receive attention in the first year.
Many large projects will take a great deal of effort and time to develop so that they can
be completed in a second or even third term. EMs are encouraged to develop short and
long term projects, and to ensure that the short term targets result in enough savings to
meet first-year targets.
1.7.3 Use some early, valuable wins to prove the value of EMs
Technical ability and project management skills are only part of being a successful
Energy Manager. A large part of EM success entails building trust with your employer.
It’s been said by some EMs that it took a year of successful operation for managers and
other sceptical personnel to trust their EM enough to consider the more extensive
projects.
Another advantage of planning for both the short and long term is that some especially
short-term but valuable projects can accelerate the building of trust and demonstrate the
value of investing in energy management. EMs should identify the more easily
implemented projects and complete those as soon as possible. Doing so should make it
easier for managers and operators to support an EM’s future activities.
&
Also critical is M&V of these early savings. Concrete, quantifiable proof of energy
savings, and therefore cost savings, makes it easier for others to trust the value of
savings made. It also solidifies EMs’ reputation as competent professionals who act
methodically and ensure they achieve results.
Example project types that could provide “quick wins”

• Lighting replacement
• Maintenance measures (e.g. filter replacements, motor and belt replacement
practices)
• Scheduling and set-backs
• Shutting down unnecessary equipment or curtailing during non-production
3.0 Training
The IESO will work with EMs to achieve their training goals, through awareness or
participation in the following programs:
• Certified Energy Manager (CEM)
• Certified Measurement & Verification Professional (CMVP)
• Other training events hosted or sponsored by the IESO
4.0 EM Funding
Energy Manager
• Assuming all obligations are met by the EM and the Participant per the EM
Funding Agreement, the IESO agrees to pay the Funding Amount to the Participant as
follows:
o $50,000 upon notice to the IESO of the EMs employment start date, and each
anniversary thereof if applicable; and
o upon approval by the IESO of the fourth Quarterly Report, the lesser of:
(A) the product of $40/MWh and the total electricity savings in MWh arising
from activities of the EM for projects that are completed and in-service up to a
maximum of
$200,000, less $50,000; and
(B) $150,000
5.0 Supporting Documentation
&
The following documentation details terms, responsibilities, and mechanics of the

Energy Manager Program.
Energy Manager Agreement: Contains legal agreements around the EM Initiative and
Schedules including many useful definitions (though not all the definitions in Schedule
are repeated), EM duties, and Participant eligibility.
Energy Management Plan Template: A possible template to use when writing an

Energy Management Plan.
Recommended YouTube video links:-
https://www.youtube.com/watch?v=dgHn2rJY7kY
https://www.youtube.com/watch?v=CEkYp-XltsU
https://www.youtube.com/watch?v=OqoUC_jWydA
Assignments Questions:-
1. What are the principles of energy management?

2. History of Energy Management?
3. What is the need for managerial skills in energy management?
4. What are the benefits of energy management?
5. What is energy efficiency and management?
6. Explain role of an Energy Manager (EM)?
7. Explain Energy Manager Strategies for Success?
8. What is the difference between energy auditor and energy manager?
PREPARED BY
DR. ANAND SINGH. HOD (EX)
LNCT, BHOPAL
If any queries kindly contact me on this email ID
[email protected]

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LAKSHMI NARAIN COLLEGE OF TECHNOLOGY, BHOPAL

ELECTRICAL & ELECTRONICS ENGINEERING DEPARTMENT

RAJIV GANDHI PROUDYOGIKI VISHWAVIDYALAYA, BHOPAL New Scheme

1.1 Energy Management

Energy management is the art and science of optimum use of energy to

Energy management can also be defined as the science involving planning,

The energy management involves strategy, policy, organisational changes,

Maximize Efficiency: Utilize the most appropriate technology to meet organizational

Some desirable sub-objectives of energy management programs include:

1) Conserving energy, thereby reducing cost

1.2 Motivation to energy management

1.2.2. Short Falls in power supplies

1.2.3. Environmental Management Systems

In certain parts of the world, especially in Europe, ISO 14001 standard on

1.2.4. Global Climate Change:

1.3 Fundamental Principles of Energy Management

Sl. Principle Relative Relative Relative Relative

16 Economic evaluation Low 1 year Low 5 – 15%

1.3.1 Review of Historical Use

1.3.2 Energy Audits

1.3 Improvement of Housekeeping And Maintenance

1.3.4 Analysis of Energy Use

(reduce flow by 50 percent),or to simulate operations (computer models of building or

1.3.5 More efficient equipment

1.3.6 More efficient processes

1.3.7 Energy Containment

1.3.8 Substitute Materials

Substitute materials can sometime be used to advantage. For example, in low

1.3.9 Material Economy

1.3.10 Materials Quality

Materials quality selection is extremely important, since unnecessary quality almost

1.3.11 Aggregation of energy

Aggregation of energy helps in achieving greater efficiency to be achieved in certain

1.3.12 Cascade Of Energy Use

1.3.13 Alternate Energy Sources

1.3.14 Energy Conversion

1.3.15 Energy Storage

1.3.16 Economic Evaluation

Economic evaluation is an essential tool of energy management. New equipment

1.4. The History of Energy Management

 Phase 1: 1973 – 1981 – "save it"

In looking forward two further phases are considered likely:

 Phase 4: 2000 – 2010 – "response to the climate change issue"

1.4.1 Phase 1: "Save it" - 1973 - 1981

A few organisations appointed accountants or purchasing staff as energy managers but

Government activity in this phase concentrated on "propaganda" and exhortation in the

1973 – 1981: Major energy events and headlines:

1973: OPEC quadruples price of oil

1979: Iranian revolution leads to second oil price rise

1.4.2 Phase 2: "Manage it" - 1981-1993

This period saw the development of energy management as a separate recognised

1981 – 1993: Major energy events and headlines:

1981: first micro-CHP technology introduced

1984/85 : Coal miners strike

1986: Energy Efficiency Year led by Secretary of State Peter Walker

1986: privatisation of British Gas

1990: privatisation of electricity supply industry, competition for > 1 MW users

1992: competition for > 2,500 therm gas users